Impacts on the mauritian economy, Microeconomics

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Problem:

(a) Define money and briefly explain its core functions.

(b) Explain the relationship between interest rate and price of bonds, illustrate using example.

(c) Distinguish between the loanable funds model and the liquidity preference model.

(d) " The Monetary Policy Committee of the Bank of Mauritius cuts the Key Repo Rate by 50 basis points" (Bank of Mauritius, 19th March 2012)

Discuss the impacts of the above on the Mauritian economy.


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