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Something here about paper money maybe???...
Along with this ability, by 1781, the Bank of England became the sole manager of the National Debt, and this meant that, knowing all about the government�s borrowing, and about its ability to pay, the Bank of England could set its interest rates based on risk, and could keep them as low as possible. Since there was only one central bank that required repayment, and the interest rate was known, it was much easier for the English government to see its own financial situation, and to act upon that in positive ways, than it had been before.
With the government, the biggest borrower, tamed, the Bank of England became the central loan provider for county banks, who could then set their interest rates low based on the interest rate they knew they were receiving from the Bank of England, thus making loans to farmers and producers both inexpensive and predictable.
This solid financial structure, combined with paper money, made it possible for spending to increase, investment to increase, and land improvements and profits to increase.
Along with this ability, by 1781, the Bank of England became the sole manager of the National Debt, and this meant that, knowing all about the government�s borrowing, and about its ability to pay, the Bank of England could set its interest rates based on risk, and could keep them as low as possible. Since there was only one central bank that required repayment, and the interest rate was known, it was much easier for the English government to see its own financial situation, and to act upon that in positive ways, than it had been before.
With the government, the biggest borrower, tamed, the Bank of England became the central loan provider for county banks, who could then set their interest rates low based on the interest rate they knew they were receiving from the Bank of England, thus making loans to farmers and producers both inexpensive and predictable.
This solid financial structure, combined with paper money, made it possible for spending to increase, investment to increase, and land improvements and profits to increase.
Many thanks for all your answers, and for all the additional information which was very interesting. Now I have the dilema of which explanation to go for! Decisions, decisions! I shall be very curious to discover what the person setting this quiz deems to be the correct answer.Thank you again anyway!
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