Question One (10 Mark) Esplain the concept of Inflation Time within the context of Ghana. What is the primary objective of Monetary Policy in Ghana? Discuss the tools used by the Bank of Glas in the conduct of Monetary Policy Question Tw(10 Marks) Accome that the money anultiplier m = (1+3/+)Where is the currency deposit ratio, is the exced reserve ratio and in the required reserve ratio a) With examples, explain what will cause an increase in the ratiosce and b) Explain the implication of an increase in cach of the ratio on the ability of the central bank to increase money supply by increasing the monetary base, Page 12 c) Asume that consumers trust in the banking sector imperwes because of more insparent banking practices. How will this affect the money multiplier and the central bank's monetary control Question Three (10 Maria) a) In ordinary language, explain the meaning of Velocity of Money by State and explain the variables in the equation of exchange Use the equation of exchange stated in b) above to explain the relationship heren changes in the money supply and the price level. State any assumption made d) Using the equation of exchange from part b) and information of the Bank of Ghana's Quant Ballen/Statistical Bulletin as well as quarterly GDP releases from the Ghana Statistical Service calculate the Velocity of Money for the Ghanaian economy from the first quarter of 2020 to the second quarter of 2021 Bused on your answer from dy is it reasonable to assume that the Velocity of Money is constant in Ghan? Why why not? The Bank of Ghana currently announces is monetary policy in terms of changes in the interest rates Monetary Policy Rate). Based on the information in par de do you think it should continue to implement this practice? If yes, explain why If not should get then Question Four (10 Mars) Assuming the government is selling a government bond to fight COVID-19, and at the meme. ASHANTI Goldfield Company is ding Corporate bond wir products Under what condition will the production linked ASHANTI Golf corporate bond be subbed at the expense of the government bendapo all poublesho Question One (10 Marks) Explain the concept of Inflation Targeting within the context of Ghana. What is the primary objective of Monetary Policy in Ghana? Discuss the tools used by the Bank of Ghana in the conduct of Monetary Policy Question Two (10 Marks) Assume that the money multiplier in = {1+c)/(1+e+c). Where is the currency deposit ratio, e is the excess reserve ratio and r is the required reservento a) With examples, explain what will cause an increase in the ratios cand b) Explain the implications of an increase in cach of the ratios on the ability of the central bank to increase money supply by increasing the monetary base. Page 1 of 2 c) Assume that consumers truse in the banking sector improves because of more transparent banking practices. How will this affect the money multiplier and the central bank's monetary control Question Three (10 Marks) a) In ordinary language, explain the meaning of Velocity of Money. b) State and explain the variables in the equation of exchange Use the equation of exchange stated in b) above to explain the relationship between changes in the money supply and the price levd. State any assumptions made ) Using the equation of exchange from part b) and information of the Bank of Ghana's Quarterly Bulletin/Statistical Bulletin as well as quarterly GDP rdcases from the Ghana Statistical Service, calculate the Velocity of Money for the Ghanaian economy from the first quarter of 2020 to the second quarter of 2021. c) Based on your answer from d) is it reasonable to assume that the docity of Money is constant in Ghana? Why or why not? 1) The Bank of Ghana curently announces its monctary policy in terms of changes in the interest rates (ic. Monetary Policy Rate). Based on the information in parts de do you think it should continue to implement this practice? If yes, caplain why. If not, what shoukl it target then? Question Four (10 Marks) Assuming the gowemment is selling a gowemment bond to fight COVID-19, and at the same time, ASHANTI Goldfields Company is selling a corporate bond to increase its production. Under what conditions will the production-linked ASHANTI Goldfields corporate bond be over-subscribed at the expense of the goverment bond Explore all possible scenarios