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critically discuss the rationale behind the introduction of negative interest rate policies (NIRPs) across economies worldwide
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- What risk is due to changes in the level of interest rate in the economy and may affect industries at the same time? a.systematic risk b. inflation rate risk c.foreign exchange rate risk d.interest rate riskWhy when the US Federal Reserve raises interest rates, some countries raise interest rates as well? An economic answer is requiredApart from risk components, several macroeconomic factors—such as Federal Reserve (the Fed) policy, federal budget deficit or surplus, international factors, and levels of business activity—influence interest rates. Based on your understanding of the impact of macroeconomic factors, identify which of the following statements are true or false: Statements True False Countries with strong balance sheets and declining budget deficits tend to have lower interest rates. When the economy is weakening, the Fed is likely to increase short-term interest rates. Long-term interest rates are not as sensitive to booms and recessions as are short-term interest rates. The Federal Reserve Board has a significant influence over the level of economic activity, inflation, interest rates in the United States.
- Which of the following is not one of the pillars of Macroeconomic policies of the Government? a. Foreign Policies b. Fiscal policy c. Monetary policy d. Exchange rate policy.Explain the concept of Inflation Targeting within the context of Ghana.Question Which of the following is a determinant of exchange rates? Answer a. A change in consumer preferences b. A change in productivity c. A change in real interest rates d. all of these
- Do you think that the Fed should control interest rates or let the free market set the rates? What are the pros and cons of having the Fed or free-market determine interest rates?Explain on the effects of rising inflation rates on the economy. How can the rising inflation rate be controlled effectively?Why would a developing country decide to liberalise its equity market?
- Has the development of the Eurodollar market made it easier ormore difficult for the Federal Reserve to control U.S. interest rates?Describe tools that the US Treasury and the Federal Reserve use to undertake restrictive monetary policy today (versus before the mortgage-debt crisis).Which of the following is a determinant of exchange rates? a. A change in consumer preferences b. A change in productivity c. A change in real interest rates d. all of these