Question

1. With the aid of a diagram, explain the effects of COVID -19 on corporations and individuals in terms of money market and interest rates.                                                                       [7 marks]
2. Briefly describe the policy tools that the Central Bank and Zambian government has used to address the economic challenges on corporations and individuals.                                 [6 marks]               
3. With the aid of a diagram, explain how the measures implemented by the Zambian government to address the economic challenges will affect money market and interest rates.          [7 marks]              
4. Briefly describe the difference between Fiscal Policy and Monetary Policy                    [5 marks]                      

                                                                       

Answer 1

Answer. Difference between fiscal and monetary policy:

* Monetary policy refers to the actions of central banks to achieve macroeconomic policy objectives such as price stability, full employment, and stable economic growth.Monetary policy addresses interest rates and the supply of money in circulation, and it is generally managed by a central bank.

*Fiscal policy refers to the tax and spending policies of the federal government. Fiscal policy decisions are determined by the Congress and the Administration; the Fed plays no role in determining fiscal policy.Fiscal policy addresses taxation and government spending, and it is generally determined by government legislation.