Assignment
1) What kinds of Monetary policy (easy or tight) should be exercised under the recessionary gap? Give examples of policy tools in terms of RRR (Required Reserve Ratio), DR (Discount rate) and OMP (open market policy).
2) Explain the" MONEY MULTIPLIER" of money creation including the formula and the process.
3) Compare discount rate, federal fund rate, prime (lending) rate and deposit rate.
4) Discuss the relationship between Bond price and interest rate.