Show point that could represent the current output combination and label
ASSIGNMENT 2
INSTRUCTIONS:
Although you can discuss answers with your classmates, the answers provided to the assignment must be your individual work. Plagiarism and copying off other students will be heavily penalised.
The total marks in the assignment are 20 marks. This will be reduced to 10 marks for the purpose of this assessment component.
Question:
Identify the Open-market operation that the Reserve Bank would use.
Draw a correctly labelled money market graph and show the short-run effect of an expansionary monetary policy on the nominal interest rate.