Economics of Money, Banking and Financial Markets, The, Business School Edition (5th Edition) (What's New in Economics)
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Chapter 25, Problem 17Q
To determine

The ability of monetary policy to address economic downturns, if adverse selection and moral hazards increases.

Concept introduction:

Monetary policy, typically the central bank or the currency board control the very short term, short term and long term borrowings, often targeting the inflation rate, interest rate to safeguard price stability and trust in the general public.

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