Question: 1.Explain how monetary policy can be used to close the (a) contractionary gap and (b) inflationary gap(In your explanation, make sure to discuss the different

1.Explain how monetary policy can be used to close the (a) contractionary gap and (b) inflationary gap(In your explanation, make sure to discuss the different tools of monetary policy)

2. You have the assignment of making a recommendation to the Chairperson of the Fed during aperiod of persistent, high inflation. What recommendations would you give to deal with the high inflation rate?

3.Explain how interest rates and the price level canaffect the demand for money.

4.What is the equation of exchange? What are the variables, which are in it, and how do they relate to each other?

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