Question 3 (Marks: 40)

The following is a discussion question. The answer should not exceed three pages and please use other sources of reference.

Q.3.1

How monetary policy is conducted in a country has an important influence on aggregate economic activity. Investigate and discuss the nature of monetary policy in South Africa, India, Brazil, China and Russia. The discussion should cover all the following points: Define monetary policy. Identify and briefly describe at least three key instruments of monetary policy in general. This does not have to be country-specific. Describe the framework within which monetary policy is conducted in South Africa, India, Brazil, China and Russia. Comment on any specific differences and/or similarities that with regard to how monetary policy is conducted in each country.

(40)