1. Outline 3 economic functions that BOJ performs

2. Explain the speculative, precautionary, and transaction motives for holding money.

3. List and explain the four (4) main functions of money.

4. If you were the Governor of the Bank of Jamaica (BOJ), state three (3) monetary measures that could use to control the money supply.

5. Explain the economic concept run on a bank and provide one (1) possible reason for such an event

6. When an economy is in decline, however, monetary policy should take a back seat to fiscal policy. In other words, fiscal policy should be the counter-cyclical force to the recessionary environment. If this does not happen, the economy will decline much further than if fiscal intervention is used to halt that decline, as business and consumer spending and investments will naturally be in retreat. This is because the natural behavior of private individuals is to retreat when there is economic danger Chung

a. Define the terms fiscal and monetary policies

b. State 2 fiscal policy tools and 2 monetary policy tools

c. Explain how fiscal policies could be used to reduce and end a recession.

d. Do you agree with the statement that, when an economy is in decline, however, monetary policy should take a back seat to fiscal policy? Justify your answer.

7. On June 28, 2018, the BOJ lowered the discount rate to 2% in light of the lower than the expected inflation rate. The BOJ notes that in March, April, and May 2018, inflation was less than the target.

a) Name the type of macroeconomic policy that has occurred?

b) Was it expansionary or contractionary? Explain

c) Name 1 other policy change that the BOJ could use to achieve the same impact on the market activities

d) Name 1 other policy change that the Ministry of Finance could use to achieve the same impact on the market activities