Take a tweet about UK economic growth - one I'm pretty sure I have written: "BoE forecasts growth of 2%".
Pretty simple. And true, to an extent, when the Bank of England made its prediction about how the UK economy would perform last year.
But not quite the full picture.
To see that, Minouche Shafik, deputy governor of the Bank of England, says that the tweet (or series of tweets given the 140 character rule) following the BoE economic forecast should actually read:
"If economic circumstances identical to today were to prevail on 100 occasions, the best collective judgment of the Monetary Policy Committee is that the mature estimate of Gross Domestic Product growth would lie above 2% on 50 occasions and below 2% on 50 occasions."
Questions
1. If interest rates fall how will that affect a) growth b) unemployment c) inflation
2. Your answer should include 'it depends' - but depends on what?
3. How would you use AD/AS to expand on your answer?
