What is the effect of monetary injection?
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What is meant by monetary injection?
(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); andii. 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.
Other things remain the same, what would be the short-run effect of a permanent increase in the Japanâs money supply on the Yen/Dollar (Â¥/$) exchange rate? What is the impact on the Yen/Dollar (Â¥/$) exchange rate if real GNP in Japan, due to the stimulation effect, also increases in the money injection process?