TASK:Producea report on India to inform a government policymaker about how changes in the central bank’s policy rate can affec tthe economy during the Covid-19 crisis. Your report should provide:
(1) An analysis of reasons why central bankers decided to cutdown their policy rates, and how aggregate demand, output levels, unemployment and inflation would respond to such a drop.
(2) An explanation of how these variables in (1), namely aggregate demand, output levels, unemployment and inflation would behave ifthe central banker decides to rise their interest rates in 2021 due to a fear of rising inflation once the economy begins to recover.
Write an analysis of reasons why central bankers decided to cutdown their policy rates, and how aggregate demand, output levels, unemployment and inflation would respond to such a drop.
