What is money illusion-what is monetary policy transmission

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Questions

1. What is the money illusion? What is monetary policy transmission? Please explain.

2. What is open market operation and how Bank of Canada can use it in an inflationary business cycle to control inflation?

3. What is Philips curve and why the shape of Philips curve is different in short-run and long-run. Please explain.

4. Why short-run aggregate supply curve (SAS) is upward sloping and it is vertical in the long-run. Please explain.

5. What wage price spiral is? Explain that how an stagflation can turn into a cost-push inflation.

6. Explain that what is crowding out effect. Explain that how crowding out effect offsets a part of an expansionary fiscal policy.

7. What is open market operation and how Bank of Canada can use it in an inflationary business cycle to control the inflation?

Reference no: EM133637254

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