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Specification:
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Monetary Policy
Click to read the article belowand then answer the questions:
China’s central bank plans policy overhaul as pressure mounts on economy
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What interest rate is the PBoC targeting as its primary policy tool?
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How is the PBoC’s targeting of a specific interest rate a departure from its previous policy implementation?
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How is the PBoC’s interest rate targeting similar to monetary policy in other countries?
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Explain what happens to the money supply when the PBoC purchased government bonds for the first time in two decades. What other policy levers used by the PBoC would have a similar effect?
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What hurdles does the PBoC face in switching to an interest rate targeting monetary policy system?
Ariel Slonim at MRU’s Econ in the News