Question1. Describe clearly the major theories of interest rate determination.
Question2. Critically measure the relationship between Money supply and interest rate.
Question3. There is now a consensus among economists and central bankers which the only long-run effect a monetary authority can have on economy is to determine the sustained, or trend, rate of inflation. That rate will result from the rate at which the monetary authority injects money in the economy.
Critically illustrate the significance of Central Bank Independence for macroeconomic performance?
Question4. Describe the Law of One Price and discuss its drawback in explaining exchange rates.
Question5. According to you, what factors determine exchange rates in long run?
Question6. Illustrate the keynesian and monetarist views of inflation?
Question7. Explain why governments tend to practise inflationary monetary policies?
Question8. Describe the different monetary measures which are available to Central Bank, giving the advantages and disadvantages of each.