Elucidate how each of these tools works

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Reference no: EM1361649

a) How does the capital/financial account differ from the current account? Give examples of what is included in each. What do we mean by a "trade deficit" and how does it relate to the international supply and demand for a nation's currency?

b) The 3 tools for conducing monetary policy are changing reserve requirements, changing the discount rate, and open market operations. Elucidate how each of these tools works.

Brief answers needed.

Reference no: EM1361649

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