Short questions
Question 1
Explain the possible effects of an increase in interest rates.
Question 2
Distinguish between the nominal rate of interest and the real rate of interest.
Question 3
Distinguish between monetary and fiscal policy.
Question 4
Explain the link between an increase in the money supply lead to and an increase in interest rates.
Question 5
Distinguish between tight (contractionary) and loose (expansionary) monetary policy
Question 6
Describe the process of quantitative easing.
Question 7
Describe the role of the Central Bank.
Question 8
Explain how a government can use monetary policy to expand aggregate demand.