Navigate to the 'Inflation' section on the DNB website. Once there, identify the European Central Bank's (ECB) target inflation percentage. Additionally, explain how interest rate changes are used by the central bank to influence inflation, specifically detailing the effects of both rate increases and decreases.
Navigate to dnb.nl. Click on the 'Thema's' (Themes) button. Click on the 'Actuele economische vraagstukken' (Current economic issues) button. Click on the 'Inflatie' (Inflation) link. Locate the ECB's target inflation percentage. Identify and explain how interest rate increases affect inflation. Identify and explain how interest rate decreases affect inflation.
Successfully navigate to the 'Inflatie' page. State that the ECB's target inflation is 2%. Explain that a rentestijging (interest rate increase) makes borrowing more expensive and saving more attractive, leading to less spending, decreased demand, and a decrease in inflation. Explain that a renteverlaging (interest rate decrease) makes borrowing cheaper and saving less attractive, leading to more spending, increased demand, and an increase in inflation.