In the wake of the global Covid-19 pandemic, the monetary policy committee (MPC) of the South African Reserve Bank (SARB) has continuously decreased the repo rate or keep it the same, in order to boost economic activity. You have been asked, as a third year monetary economics student, to advise the Governor of the South African Reserve Bank on such decision. In your answer, highlight the following:

(i) mention the 2 types of monetary policy and indicate the one that the SARB embarked on;

(ii) point out the effectiveness of monetary policy, and

(iii) state the transmission mechanism that is most effective and why it could be considered. [