Owing to increasing, food and transport prices, the Consumer Price Index (CPI) in South Africa accelerated from 6,5% to 7,4% in June 2022. As a result, the Monetary Policy Committee (MPC) decided to increase the repurchase rate by 75 basis points to 5.50% per year, with effect from 22 July 2022. With the aid of a diagram, explain how the money market in South Africa will be affected by the MPC’s decision to increase the interest rate. The direction of any changes should be clearly indicated by using arrows.
Owing to increasing, food and transport prices, the Consumer Price Index (CPI) in South Africa accelerated from 6,5% to 7,4% in June 2022. As a result, the Monetary Policy Committee (MPC) decided to increase the repurchase rate by 75 basis points to 5.50% per year, with effect from 22 July 2022. With the aid of a diagram, explain how the money market in South Africa will be affected by the MPC’s decision to increase the interest rate. The direction of any changes should be clearly indicated by using arrows.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Owing to increasing, food and transport prices, the
South Africa accelerated from 6,5% to 7,4% in June 2022. As a result, the
Policy
to 5.50% per year, with effect from 22 July 2022.
With the aid of a diagram, explain how the
affected by the MPC’s decision to increase the interest rate. The direction of any
changes should be clearly indicated by using arrows.
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