Build the chain of reasoning

Arrange the steps to show how raising interest rates affects inflation.

🔗 Chain 1 of 3 ⏱ Est. 15 mins ⚠ 2 imposters to spot

🔥 12 streak

🔗 Link it · Monetary policy

Explain how a rise in interest rates leads to a fall in inflation. Build the correct chain from the steps below — and identify the 2 imposters.

Drag steps into the correct order. 2 of the cards are imposters — they don't belong in this chain. Leave them in the available steps panel.

Available steps

Drag the correct steps to your chain

8 steps · 2 imposters

⚠ 2 of these steps are imposters — they belong to a different chain

Your chain

Drop steps here in the correct order

0 of 6 placed

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5/6

Great chain!

You got 5 out of 6 steps correct and spotted 1 of 2 imposters.

✅ Strong: You correctly identified that higher interest rates increase borrowing costs for households and firms.

✅ Strong: Good use of the AD model — you showed how reduced C and I shift AD to the left.

❌ Missed step: You skipped the exchange rate channel — higher UK rates attract foreign capital, appreciating £, reducing export competitiveness and net exports (X-M).

⚠ Imposter spotted: You correctly identified "Government spending increases" as an imposter — that belongs in fiscal policy.

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