Reference no: EM132631393

Q-1. You are the new Governor of State Bank of Pakistan after Reza Baqir. For each of the situations listed below, decide if you would use Easy-Monetary policy or Tight-Monetary policy.

Scenarios:

Q-1. (A). RGDP dropped from 3 percent to 1 percent in the last year.

Q-1. (B). The CPI and GDP deflator have risen 3 percent in the last six months.

Q-1. (C). Commercial interest rates are rising, but the SBP has not raised rates.

Q-1. (D). RGDP is growing steadily, and prices are rising sharply.

Q-1. (E). The Pakistan is experiencing both high inflation and high unemployment.

Q-1. (F). We are in a recession. Factory orders are down, and the economy appears to be slumping.

Q-1. (G). Unemployment is low and prices are rising steadily.

Q-1. (H). Unemployment rates are pushing 11 percent while the CPI has fallen from 8 percent to 2 percent growth.

Q-1. (I). We are in a recession but are experiencing high inflation.

Q-1. (J). The money supply appears to be tight, and prices are on the rise.