Answer to Question #89354 in Macroeconomics for Matagali

Question

Suppose you are recommending monetary policy. The economy is experiencing a sharp and prolonged inflationary trend.
a. What change in open market operations would you recommend? (1 mark)
b. Explain how the change you advocate would affect the cash rate. (2 marks)
c. Explain how the change you advocate would affect the cost and availability of credit.
(2 marks)
d. Use diagrams/graphs of the money market and also AD-AS to support your discussion

Answer 1

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