MONEY AND BANKING course Questions

In class, we discussed how central bank uses monetary policy to fight recessions and inflations
A. Using graphs only to show how the central bank use monetary policy to fight recession [1 mark]
B. Explain with the aid of graphs how central bank uses monetary policy to fight inflation [3 marks]
C. Explain the condition which should be available for the success monetary policy to fight recession and/or inflation. [1 mark]
Remember to correctly label your graphs. Any graph is not correctly labeled would not be considered for full marks.
(Q2) Write 2 paragraphs bout the concept of quantitative easing, its purpose and consequences. [5 marks]
(Q3) In the market of reserves, show by the aid of graphs, how monetary policy would be effective or
ineffective. Remember to correctly label your graphs. Any graph is not correctly labeled is not
considered for full marks. [5 marks]

Answers

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