The Financial Times journalist Chris Giles and Claire Jones

"Bank of England signals more QE"

The Bank of England signalled it was likely to pump billions more into the economy, after slashing its forecasts for inflation on Wednesday and saying output was likely to stagnate until next summer....While many politicians, including the prime minister, look towards the European Central Bank to provide unlimited liquidity to eurozone governments ..... Sir Mervyn rushed to the defence of the ECB and Bundesbank which have been resisting the move. "It's not the job of a central bank to do something which a [eurozone] government could perfectly well do itself," the Bank governor said.

In a format of your own choice, and with a word limit of 3,500, complete all the following tasks:

Task 1 700 words

Explain how the Bank of England has implemented Quantitative Easing, and what was its stated economic justification for doing so.
Describe the global Macroeconomic conditions leading to the adoption of the Quantitative Easing policy and whether or not the same objectives were achievable only by acting on the interest rate.

Task 2  1400 words

Assess both the theoretical justifications and criticisms of this type of monetary policy. Interpret the Quantitative easing Policy within the debate on "Rules versus discretion" and assess if there is a risk if a potential conflict between inflation targeting and quantitative easing.

Task 3 1400 word

Discuss and Compare the monetary policies adopted by the Bank of England with those adopted by the Federal Reserve in the US and by the European Central Bank.

• In all three tasks you should try to relate macroeconomic theory to the situations you are describing, using, where appropriate, diagrams and figures to back up your arguments.

• Note that presentational and referencing skills will be taken into account in the mark scheme.

Word Limit: 3500 word.