Question

(a) Using no more than 200 words (omit any graphical illustrations) explain the following puzzles:

i. at the onset of the global financial recession in September 2007, the conventional monetary policy turned out to be ineffective in boosting the aggregate demand (AD); and

ii. even a non-conventional monetary policy, involving a sudden and swift injection of an extraordinarily large quantity of money in October 2007 did not seem to make any difference in halting the rise of unemployment.