QUESTION 7 [5 Marks] The South African Reserve Bank decreased the policy rate by 0.25 basis points at the end of March. Use open-economy IS-LM graphs (i.e. the Mundell-Fleming model) to explain the impact of this expansionary monetary policy on the South African economy's output, local interest rates and the Rand exchange rate. Explain the subsequent impact on consumption. investment and exports. QUESTION 8 [4 Marks] What is meant by the dynamic inconsistency of monetary policy? Explain why this inconsistency arises and how adopting ination targeting as a monetary policy regime can solve it. QUESTION 9 [4 Marks] South Africa's public debt increased signicantly since 2008. Discuss the dangers of high levels of public debt in developing countries like South Africa