1."The Bangladesh Bank has created additional money worth Tk70,794 crore through various refinance schemes and easing regulatory requirements after the Covid-19 outbreak in March for stimulating demand to revive the declining economy." (link: https://tbsnews.net/economy/banking/bangladesh-bank-creates-money-worth-over-tk70000cr-revive-economy-76435?fbclid=IwAR108OXKcbXq6JjZj6v9FbULrDtys_QsZySUTKeAmauoqTjppgnLqU89muw#.Xq5kdXhgRqq.facebook).

a.If government increases money supply do you think if will affect product market? How it will affect i. the price level, value of money, and ii. loanable fund market? Use the relevant diagrams.

b.According to Monetarism, when does an increase in money supply change both Real GDP and price level? In the short run or in the long run? Explain your answer using a diagram.

Do you think creating this additional money will lead to inflation? What type of inflation, demand-induced or supply-induced? Do you think it will be continued inflation? Why? Draw a relevant diagram to explain your answer.