Question
1. List and describe six primary functions of the central bank. 2. What is the equation of exchange? What are the variables, which are in
1. List and describe six primary functions of the central bank.
2. What is the equation of exchange? What are the variables, which are in it, and how do they relate to each other?
3. Explain what the Fed should do to remove a recessionary gap. Illustrate the effect of its policy with an AD/SRAS/LAS graph. Make sure to mention all the tools of monetary policy.
4. Explain what the Fed should do to remove an inflationary gap. Illustrate the effect of its policy with an AD/SRAS/LAS graph. Make sure to mention all the tools of monetary policy.
5. You have the assignment of making a recommendation to the Chairperson of the Fed during a period of persistent, high inflation. What would you suggest restoring stable prices?
6. Do you believe that China is guilty of unfair trading practices including currency manipulation?
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