Question1. Illustrate the term velocity of circulation of money.
Question2. By comparing the Fischer’s Quantity Theory of money and Keyne’s Liquidity Preference Framework, describe clearly how velocity of circulation of money is differentiated in models.
Question3. Contrast the two major transmission channels that characterize the credit view.
Question4. Discuss which asset price channel of transmission of monetary policy is gaining significance in era of globalization.
Question5. Describe the mechanisms of equity price channels.
Question6. Use graphical techniques to make a distinction between cost push and demand pull inflation.
Question7. Describe how a budget deficit of the government can cause inflation.
Question8. Explain what is inflation targeting and describe how it can be adopted by the Bank of Mauritius.
Question9. Write notes on following:
(a) Activist and non activist monetary policy debate.
(b) Optimality of Policy Rule compared to discretionary monetary policy.
(c) Credibility of policy rule.