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QUESTION
(a) Analyse the activist and non-activist policy makers' choice between implementing a policy rule or a discretionary monetary policy.
(b) Explain why the policy rule is not credible and discuss the solutions to overcome this problem.
Write detailed notes on any Two of the following:
(a) The equity price channel for transmission of monetary policy.
(b) The credit view.
(c) The causes and persistence of inflation.
(d) Friedman modern quantity theory and its empirical validity.
factors that affect the volume of production in economy
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constraints
There are three firms in an economy: A, B, and C. Firm A buys $450 worth of goods from firm B and $260 worth of goods from firm C, and produces 260 units of output, which it sells
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