Participation in the discussion thread is worth [30 points] per unit. The assignment consists of two things—posting your first response to the prompts, and participating in the conversation by responding to at least three of your peers’ postings. Discussion prompt response The full [20 points] will be given to a discussion response posting that Delivery: Clear, grammatically correct, complete sentences with rare misspellings, responds to every aspect with originality (how well do you say it) Quality of Expression: generates learning within the community; demonstrates knowledge and insight; understanding of material from the text; thoughtful; support points with reasons, logic and examples (how much does it move the discussion forward). For example, does your posting identify and describe key economic concepts that apply from this unit’s readings and apply and explain economic key concepts from this weunit s readings to a real life example Relevance: relates to, or expands on, the main theme of the discussion topic (is it on point) At the discretion of the instructor, points will be taken off any response that does not fulfill all of these goals. Late points will be deducted according to the standard late submission policy. Prompt: initial posting done in the required timeframe (is it on time) All initial discussion prompt responses are due by 11:59 p.m. on Friday. The responses to peers’ postings are due by 11:59 p.m. on Sunday. Questions Many countries have central banks that are responsible for their nation’s monetary policy. Go to the Bank for International Settlements website: Bank for International Settlements Website: Select one of the central banks (for example, Norway). Review that bank’s website to determine its policies regarding application of monetary policy. How does this bank’s policies compare to those of the U.S. central bank?

Central bank of Norway

The Central Bank of Norway has a monitory policy that directs the Norway’s key interest rate. The key interest rate is the interest rate charge in banks deposits’ up to a particular quota in Norges Bank. Norges bank sets the key interest rate with the aim of stabilizing the country’s inflation to a low level (Mishkin, 2004). The key interest rate is used to influence short-term rates that are used in the money market. The monetary policy enables the Norges Bank to change the key interest rate and intervene in the foreign exchange market to regulate the Krone exchange rate. Interventions made by the bank respond to short-term fluctuations. Norges Bank executive boards make the decision on interest rates targeting stabilizing the economic output and employment levels.


The policies observed by the central bank of Norway are transparent as the key interest rate set on deposits, targets to secure a Stable inflation that is low. The Norges bank communicates its monitory policies through reports illustrating its transparency.  The policies are predictable because the interest rates set by the Norges Bank are influenced by the market expectation which fosters future developments. The key interest rate is understood by all participants in the market-enhancing the predictability of the interest rates. Norges bank transparency and predictability is different from policies the Federal Reserve of the United States applies (Mishkin, 2004). The Fed carries out open-market operations to regulate money available in the economy and enhance stability. The Fed also sets discounted rates on banks loans from the Federal Reserve Bank. The Fed system influences interest rates by setting various reserve requirements. The requirements indication the amount of money financial institutions should hold in their reserves.



Mishkin, F. S. (2004). Can central bank transparency go too far? (No. w10829). National Bureau of Economic Research.


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