Problem
1. Explain how central banks are able to set the level of short-term interest rates.
2. Explain briefly why ‘credibility' and ‘openness' are desirable properties in the conduct of monetary policy.
3. What features of the UK's monetary policy framework contribute to credibility and openness?
4. Why might responsibility for the government debt market inhibit a central bank's conduct of monetary policy?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.