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What will be the effect on money supply of the country in the following situations? Explain briefly how will money supply increase or decrease in
What will be the effect on money supply of the country in the following situations? Explain briefly how will money supply increase or decrease in each case;
- Government sells $10,000 Treasury Bills in the market.
- Central bank increased the policy rate by 5%.
- Statutory Liquidity Ratio increased by 3.5%.
- Central bank increased the Cash Reserve Ratio by 4%.
- According to you which type of monetary policy is followed in this hypothetical economy? Why do you think so?
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