1. According to the European Central Bank, the treaty establishing the European community "makes clear that ensuring price stability is the most important contribution that monetary policy can make to achieve a favourable economic environment and a high level of employment". If price stability is the only goal of monetary policy, explain how monetary policy would be employed during a recession. Also, evaluate whether the negative interest rate regime introduced by the ECB is successful in its objective.
2. How does the persistent hyperinflation in Venezuela affect the business and economic environment? Explain.
3. The current account deficit (CAD) in the USA, China, France and many other countries is growing rapidly in recent years. Why should these countries be concerned about widening CAD? Elucidate the available policy instruments and their effectiveness to improve the current account balance