The monetary transmission mechanism can be depicted in the form of a graph or using symbols.Explain, with the aid of symbols, the monetary transmission mechanism when interest rates increase (Note: Prices and wages are variable.)
1. The monetary transmission mechanism can be depicted in the form of a graph or using symbols.Explain, with the aid of symbols, the monetary transmission mechanism when interest rates increase (Note: Prices and wages are variable.)
2. Explain, using the AD‐AS model, how the South African Government can use fiscal policy as a tool to recover from the negative effects of this COVID‐19 pandemic.
Your answer must include the following:
The description of the type of fiscal policy required;
An explanation of how the implementation of this tool will work their way through the economy to achieve the desired effect;
The AD‐AS graph showing the implications of your recommendations. (5)
Marks will be awarded for your ability to integrate theory with the scenario
provided.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
