• Share a real-life scenario where a central bank would find it necessary to implement expansionary monetary policy. How would this policy aim to stimulate the economy, and what potential benefits or risks might arise from its implementation?
• Describe a situation where a central bank would want to implement contractionary monetary policy. How can this policy aid in curbing inflationary pressures or maintaining financial stability? Consider the potential impact on consumers, businesses, and the overall economic environment, and highlight any potential challenges or trade-offs that may arise from implementing contractionary measures.

Banks act as financial intermediaries because they stand between savers and borrowers. Savers place deposits with banks, and then receive interest payments and withdraw money. Borrowers receive loans from banks and repay the loans with interest. In turn, banks return money to savers in the form of withdrawals, which also include interest payments from banks to savers

Banks also perform several roles amongst businesses and individuals.

1. Identify the rolls that banks play in your day-to-day life.
2. Explain how a change in banking policy may impact a life decision that you will one day, or maybe have in the past, come across. This can include, among other decisions, a major purchase, a decision regarding schooling, or a decision to start a business.