QUESTION 1 a) Explain what the FIVE (5) objectives of a Central Bank ? b) Using T-account, describe how banks create money? c) If a Central Bank wanted to use all three of its policy tools to decrease the money supply, explain what it would do? QUESTION 2 a) A farmer grows oil palm, which he sells the fruits to a miller for RM100. The miller turns the fruits into oil, which he sells to a soap manufacturer for RM150. The soap manufacturer turns the palm oil, into soap, which he sells to consumers for RM180. Consumers use soap. 1 . What is the GDP of this economy? Explain 11 . Value added is defined as the value of a producer's output minus the value of the intermediate goods that the producer buys. Assuming there are no intermediate goods beyond those described above, calculate the value-added for each of the three producers. 111. What is the total value added by the three producers in this economy