Question 3Question 4

g what is quantitative easing and in what way does it help to counter slow economic growth in an economy? 10 What is the difference between credit risk and liquidity risk? PROBLEMS AND APPLICATIONS 1 What characteristics of an asset make it useful as a medium of exchange? As a store of value? 7 Suppose that someone in one of the South African provinces discovered an easy way to counterfeit R100 banknotes. How would this development affect the monetary system of South Africa? Explain. Should central banks place as much emphasis on financial stability as on price stability? Justify your answer. To what extent is a policy of quantitative easing likely to be inflationary? Should financial markets be subject to more or less regulation if we are to avoid another financial crisis of the scale of that witnessed between 2007 and 2009? Justify your