On the De Nederlandsche Bank website, what is the European Central Bank's (ECB) target inflation rate? According to the website, how does an increase in interest rates affect inflation, and how does a decrease in interest rates affect inflation?
Navigate to dnb.nl. Accept the cookie preferences by clicking 'Alles accepteren'. Click on 'Aanpak van inflatie' (Approach to inflation) under 'Actuele vraagstukken'. Identify the ECB's target inflation rate. Locate and extract the described impact of an interest rate increase on inflation. Locate and extract the described impact of an interest rate decrease on inflation.
State that the ECB's target inflation rate is 2%. Explain that an interest rate increase makes borrowing more expensive and saving more attractive, leading to less spending, decreased demand, and a decrease in inflation. Explain that an interest rate decrease makes borrowing cheaper and saving less attractive, leading to more spending, increased demand, and an increase in inflation.