Question

want to know definition and explanations

Sterilization;
Adjustment Problem;
Liquidity Problem;
Confidence Problem;
M/P = L(r, Y);
Trinity Dilemma;
Managed Floating Exchange Rates;
Adjustable Peg;
Dollar Shortage;
Marshall Plan;
Gold Convertibility;
Triffin Dilemma;
EPU (1950);
EMS;
ERM;
OCA Theory;
Rule-based Monetary Policy;
Taylor Rule & Principle.

Answer 1

1.Sterilization is a monetary policy in which the Fed tries to manage the effect of inflows and outflows of capital on the money supply of a given economy.

2.Adjustment problems-any significant change in the economy leads to the adjustment problem,as in to adjust the economic variable from their deviations.Like if Aggregate supply falls then price rises.Adjustment problem is to manage economic variable to bring back the price back to its equilibrium level.

3.Liquidity problem is the difficulty any economy or even a business faces while converting an asset into cash.

4.Confidence problem-Sometimes the outlook of the consumers of the economy changes due to fiscal and monetary policy or inflation and unemployment rate.The confidence problem affects aggregate demand which further affects output of the economy.

One expert answers only the first four questions.