The President of Ghana launched the COVID-19 business alleviation program in

collaboration with the National Board for Small Scale Industries (NBSSI), Trade

Associations, and some selected banks. Under the program, the government is giving

funds without interest to selected financial institutions for onward lending to businesses

at a 3% interest. The program is aimed at helping beneficiaries to sustain their businesses during the Covid-19 pandemic. Use this information to answer the following

questions.

a. Explain the monetary policy tool being used by the

government under this program. (5 Marks)

b. Explain the expected impact of the low-interest rate program on gross

domestic product (GDP), articulating the possible pathways.(7.5 Marks)