Q.31 A) What is a safety net program? State two of its main roles.
Q.31 B) State any THREE problems that can exist if the GNP is used for the economic well-being.

Q.32 A) Write TWO disadvantages of floating exchange rate.
Q.32 B) Suppose SBP decides to increase the interest rate. With the help of a graph, suggest how might this decision affect the exchange rate equilibrium?

Q.33 A) Define the Money Multiplier and explain how does it impact on money in circulation?
Q.33 B) Suppose initial deposit is Rs. 100 billions and reserve requirement is 20%. Calculate the multiplier effect.

Q.34 A) Briefly explain FOUR effects of Contractionary Monetary policies on the economy.
Q.34 B) Describe Contractionary Monetary policy.

Q.35 A) Define money.
Q.35 B) Why are cheques and credit cards not counted as money?
Q.35 C) Describe any THREE functions of money.

Q.36 Describe any FIVE key objectives of the International Monetary Fund (IMF)?

Q.37 List the various tools of monetary policy. Describe any of the two qualitative and two quantitative tools.

Q.38 A) What is meant by a demand for money?
Q.38 B) Identify the cost of holding money?
Q.38 C) Describe any THREE factors that affect the demand for money.

Q.39 Discuss the decision making process emphasizing on risk and its management.