Question

Question one

(a)Explain the credit channel for contractionary monetary policy and explain how a loose monetary policy affects the economy through this channel ?

(b)Discuss the criteria for a good instruments monetary system ?

(c) Explain the four major instruments traded in the money market in Zambia?

(d ) Explain four objectives of monetary policy in Zambia ?

(e) Explain three instruments of monetary policy used in Zambia ?

Question two

(a)how would a decrease in the reserve requirement affect (a) size of the money multiplier ,(b) amount of excess reserves in the banking system and(c) extent to which the system could expand the money supply through the creation of checkable deposits via loans ?

(d) explain any four options available to the bank of Zambia to increase the money supply ? explain how each works ?

(e) explain the three main features of money ?

(f) Describe the three forms of efficient market hypothesis ?

Answer 1

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