Problem 1:
(a) Analyze the asset price channels other than the traditional interest rate channel.
(b) Analyze Bank lending channel and discuss its importance for the Mauritian economy.
Problem 2:
(a) Analyse the characteristic equation of the Capital Asset Pricing model.
(b) Explain the differences and similarities between the Capital Asset Pricing Model and Arbitrage Pricing Theory.
Problem 3:
Write short notes on the following:
(a) Fisher's Quantity Theory of Money
(b) Interest rate Channel
(c) Efficient market hypothesis