Question 1 a. Consider the current economic condition both globally and locally in Bahrain, including inflation and 3con

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Question 1 A Consider The Current Economic Condition Both Globally And Locally In Bahrain Including Inflation And 3con 1 (38.67 KiB) Viewed 24 times

Question 1 a. Consider the current economic condition both globally and locally in Bahrain, including inflation and 3conomic growth. Do you think that the central bank should increase interest rates, reduce interest rate, or leave interest rates at their present levels? Provide explanation for your answer. b. The central bank use monetary policy to control the level of inflation. Explain how the government fiscal policy can make the policy of the central bank more difficult. Specifically, if the government has a plan to implement a new program that will expand the benefits to most people in the country. The new program is likely to increase government deficit. Discuss the impact of this policy on interest rates and show how this make the task of the central bank more difficult.