Questions and problems 1. Explain how a central bank is different to the other financial institutions you came across in Unit 1, particularly commercial banks. 2. Explain how (i) open market operations (ii) reserve requirements and (iii) the discount rate can be used to stimulate spending in an economy in an attempt to boost economic growth. 3. An economy is suffering from a high and rising inflation rate. Explain how (i) open market operations (ii) reserve requirements (iii) the discount rate and (iv) moral suasion may be used to dampen the inflation rate. 4. Discuss arguments for and against the independence of the central bank.

Questions and problems 1. Explain how a central bank is different to the other financial institutions you came across in Unit 1, particularly commercial banks. 2. Explain how (i) open market operations (ii) reserve requirements and (iii) the discount rate can be used to stimulate spending in an economy in an attempt to boost economic growth. 3. An economy is suffering from a high and rising inflation rate. Explain how (i) open market operations (ii) reserve requirements (iii) the discount rate and (iv) moral suasion may be used to dampen the inflation rate. 4. Discuss arguments for and against the independence of the central bank.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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