1. This questions is based on the article, "Central banks should consider offering accounts to everyone," published by The Economist on May 26, 2018. The article examines the idea that people are allowed to open accounts at the central bank so that quantitative easing (QE)i.e. injecting large amounts of newly printed cash into the economycould be conducted directly through those accounts rather than indirectly via banks, as is the current practice. The article also argues that using electronic money for such accounts may enable the central bank to connect with the population and manage its monetary policies more directly, rather than going through the banking system, as is currently the case.

(a)According to the article, one consequence of individual central-bank accounts is that the central bank could gain more direct control of money supply. How does the banking system work right now, and who are the intermediaries between the central bank and the population? How may these intermediaries interfere with the monetary policies propagated by the central bank? And how would the proposed individual central-bank accounts impact monetary policy?