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Money and Banks 1. Illustrate the balance sheet of a bank and explain what the central bank is and what functions it performs 2. Complete

Money and Banks

1. Illustrate the balance sheet of a bank and explain what the central bank is and what functions it performs

2. Complete the following sentence based on your knowledge of interest rates, credit and debt:

" If the annual interest rate is 10%, this means that 100 euros today are equivalent to ____ euros in one year and that 100 euros available in one year are equivalent to ____ euros today. If inflation is 5%, the real interest rate will be equivalent to ____ if the nominal rate interest rate decreases from 10 to 8%, creditors are ____ because ____ ."

3. Briefly discuss the benefits of free trade at the international level

4. Discuss/Explain Okun's law

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