Reference no: EM133372761

Questions

1. What is a monetary policy regime and why is it important?

2. How could a central bank with an exchange rate targeting regime aim to achieve price stability? (the case when there is an increase in demand and a decrease in demand for local currency)

3. What is a currency board?

4. If there is a large inflow of capital, what will happen to the country's exchange rate? Why?

5. If there are large capital inflows, conceptually how can the central bank under a regime of targeting the exchange rate keep the exchange rate within its announced objective?

6. If a large number of importers need large amounts of foreign currency to pay for their import purchases at the same time, what would happen to the exchange rate?

7. How can the central bank keep the exchange rate at the announced target if a large number of importers need large amounts of foreign currency to pay for their import purchases at the same time?

8. What could be the reason for saying that those countries that have an exchange rate targeting regime do not have monetary policy independence? - The impossible trinity?

- Why is it impossible for a central bank to achieve an exchange rate target, allow free capital flows and maintain monetary policy independence at the same time in the long term?

9. What is the theoretical basis of the intention to increase the monetary supply?

10. What are the advantages of adopting the goal of increasing the monetary supply as a monetary policy regime?

11. What does Goodhart's law say and how is it applied in the practice of monetary policy?

12. What are the advantages and disadvantages of the risk management approach to monetary policy?

13. What does Taylor's model show?

14. What are the features and rationale of inflation targeting?

15. Under inflation targeting, how does the transparency, accountability and reliability of the central bank come into play? - who is more transparent, the target of inflation or the target of increasing the money supply?

16. What is the main monetary policy instrument of a bank? central bank with an inflation targeting regime normally uses to achieve its inflation target? 16. What is unconventional monetary policy and through what mechanisms is it realized?

17. What are the challenges of unconventional monetary policy?