Q1. Why I having a nominal anchor important for you to achieve inflation targets ? What is the drawback of using a nominal anchor? What is the growth rate of the money supply of this economy? If you chose to adapt a money supply target, which money supply growth rate will allow you to meet your inflation target?
Q2. The following are the examples of typical economic decisions made by the managers of a firm. Determine and explain which basic economic problem: of what, how and for who apply to the following the economic decision. Should the company makes its own spare parts or buy them from an outside vendor?