Week 1 Forum Topic FINC622

Topic: Quantity theory of money. Answer 1, 2 and 3. What will happen to nominal GDP if, instead, the money supply decreases by 8 percent and velocity does not change? What will happen to nominal GDP if, instead, the money supply increases by 5 percent and velocity decreases by 5 percent? What happens to the price level in the short run in each of these three situations?

Macroeco discuss

Question: In the context of monetary policy and inflation targeting, consider a scenario where a central bank adopts a contractionary monetary policy. Assuming the economy initially operates at the natural rate of unemployment and the Phillips Curve holds in the short run, which of the following outcomes is most likely? A) Short-term increase in both inflation and unemployment. B) Short-term decrease in inflation and an increase in unemployment. C) Long-term stabilization of inflation with no change in unemployment. D) Immediate increase in economic growth and reduction in inflation. Don't use chatgpt please provide valuable answer Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.

Question: Demand-pull inflation occurs when: A) Costs of production decrease B) Aggregate demand exceeds aggregate supply C) Consumer savings increase D) Government spending decreases

questions 1-4

Topic: Federal Reserve and the Central Bank Question: What is a bank run and why might a bank run worsen if a bank has to sell assets in response to depositors’ withdrawals?

QUESTION ONE The Central bank of any country is a national bank responsible for the implementation of the monetary and fiscal policy of a country in order to avert or reduce inflation. This means that the bank is a vehicle through which the government accomplishes many of its economic objectives and deliver development to its citizens. Inflation can be too toxic to an economy as it diverts the economic intentions of any government. One of the impact of increased inflation is on an increased unemployment levels (Olivia Beria, 2016).i. Using Philips Curve, illustrate how increased inflations affects unemployment levels. ii. . Real money demand refers to the amount of money people want to hold in real terms, which means adjusted for inflation. It represents the desire for individuals to hold a certain amount of purchasing power in liquid form, in order to facilitate transactionsand make purchases. The real money supply is equal to the nominal amount of M2, divided by the fixed aggregate…

11 The Jamaican government’s economic policy seems to be targeting inflation. Discuss the pros and cons of this policy direction

QUESTION 8 Which of the following statements in relation to monetary policy is false? The objective of monetary policy by the European Central Bank is price stability The monetary transmission mechanism outlines how monetary policy changes affect output Monetary policy in Ireland is set by the Central Bank of Ireland Quantitative easing is a form of money creation 0000

Discussion board for economics class: The Federal ReserveInstruction:Open a new thread and answer the question posted below. Your answer should be in the form of a mini-essay between 150-300 words.Read and respond to at least one of the your other classmates’ posts.Question: Some argue that the Federal Reserve is critical to our continuous economic stability and prosperity. Some others contend that the Fed should be abolished. What do you think is the right perspective?    ……………..Answer Preview……………… America’s central bank is known as the Federal Reserve and is fully responsible for the stability, flexibility as well as well-being of its financial and monetary systems (Bernanke, 2013). The Fed oversees and manages banks and other financial institutions in order to assure the well-being of the banking and financial systems of the country and to safeguard the credit rights of…

“The Bank of Zambia’s Monetary Policy Committee has kept the monetary policy rate unchanged for over a year despite inflation being consistently above the 6-8% target range”. DISCUSS

SECTION B: MACROECONOMICS QUESTION 3 The mandate of the South African Reserve Bank (SARB) is to target inflation and keep it within the band of 3% - 6%. The bank does this through adjusting the repo-rates. Discuss three channels of the money transmission mechanism emanating from fluctuations of the interest rates.

Sh 8  Subject - Economics

3-) Question: The difficulty linked with decreasing money to escape is called .......... a) demand / inflation tax / variable yardstick costs b) demand / inflation / menu costs c) holdings / the inflation tax / shoeleather costs m d) supply / inflation / fixed costs e) demand / inflation / inflation targeting

Questions :- 1- What led to the big increase in inflation rate? 2- What are some of the economic consequences of high inflation?

Question 3: A individual wants to manage its demand for monetary assets. The options available include a bank deposit that pays 15% interest but requires 2 hours of dedicated time at bank during work hours to withdraw money. The total transaction need is $10,000 and the hourly wage rate if $7 for the individual. Find the optimal visits to the bank and average amount that is kept at bank. The economy is experiencing high inflation and the Governor State Bank makes the following observations. The Growth of Money Supply is 40%, the growth of income Y is 10% and growth in nominal interest rate is 20%. The interest rate elasticity is -0.1 and income elasticity is 0.5. What is the current inflation, and what should be the new value of money growth if Governor wants inflation to be 2%.

9) Explain why inflation may tend to accelerate.

TOPIC: Dynamic Model of Money Explain this statement: "The dynamic model of money starts with the economy in a steady state, or long-run equilibrium."

4.) There are 80 million citizens in an economy. 45 million people are in the labor force and 1.8 million are unemployed.a) Calculate the unemployment rate.b) The natural rate of unemployment is 5%. How will the inflation rate change?c) Due to the progress of digitalization, the natural rate of unemployment decreases to 3.5% in the next year. However, the actual unemployment rate initially remains constant due to other effects. How does the inflation rate change?

Background: Some years back policy makers in the Kingdom of Bahrain were faced with rising inflation caused by the fall in the value of the US dollar relative to other currencies. The Kingdom’s currency unit, the Bahraini dinar (BD), is pegged to the dollar, so when the dollar goes down in value the BD goes down as well. A weaker dollar/dinar means that anything and everything Bahrainis buy from overseas cost them more dinars. The dramatic fall in the dollar/dinar essentially made all Bahrainis poorer in terms of what their money would buy. To soften the effect of the peg the government agreed at the time to give each low-income Bahraini household (but not non-Bahraini residents, who represent 52.7% of the Kingdom’s population and 70%-plus of its workforce) BD50 (equal to $133) monthly to make it easier to buy what food and other necessities.  We can’t forget, however, that inflation can be caused by putting too much money into the economy and that a rise in the general price of…

Background: Some years back policy makers in the Kingdom of Bahrain were faced with rising inflation caused by the fall in the value of the US dollar relative to other currencies. The Kingdom’s currency unit, the Bahraini dinar (BD), is pegged to the dollar, so when the dollar goes down in value the BD goes down as well. A weaker dollar/dinar means that anything and everything Bahrainis buy from overseas cost them more dinars. The dramatic fall in the dollar/dinar essentially made all Bahrainis poorer in terms of what their money would buy. To soften the effect of the peg the government agreed at the time to give each low-income Bahraini household (but not non-Bahraini residents, who represent 52.7% of the Kingdom’s population and 70%-plus of its workforce) BD50 (equal to $133) monthly to make it easier to buy what food and other necessities.  We can’t forget, however, that inflation can be caused by putting too much money into the economy and that a rise in the general price of…

Background: Some years back policy makers in the Kingdom of Bahrain were faced with rising inflation caused by the fall in the value of the US dollar relative to other currencies. The Kingdom’s currency unit, the Bahraini dinar (BD), is pegged to the dollar, so when the dollar goes down in value the BD goes down as well. A weaker dollar/dinar means that anything and everything Bahrainis buy from overseas cost them more dinars. The dramatic fall in the dollar/dinar essentially made all Bahrainis poorer in terms of what their money would buy. To soften the effect of the peg the government agreed at the time to give each low-income Bahraini household (but not non-Bahraini residents, who represent 52.7% of the Kingdom’s population and 70%-plus of its workforce) BD50 (equal to $133) monthly to make it easier to buy what food and other necessities.  We can’t forget, however, that inflation can be caused by putting too much money into the economy and that a rise in the general price of…

Background: Some years back policy makers in the Kingdom of Bahrain were faced with rising inflation caused by the fall in the value of the US dollar relative to other currencies. The Kingdom’s currency unit, the Bahraini dinar (BD), is pegged to the dollar, so when the dollar goes down in value the BD goes down as well. A weaker dollar/dinar means that anything and everything Bahrainis buy from overseas cost them more dinars. The dramatic fall in the dollar/dinar essentially made all Bahrainis poorer in terms of what their money would buy. To soften the effect of the peg the government agreed at the time to give each low-income Bahraini household (but not non-Bahraini residents, who represent 52.7% of the Kingdom’s population and 70%-plus of its workforce) BD50 (equal to $133) monthly to make it easier to buy what food and other necessities. We can’t forget, however, that inflation can be caused by putting too much money into the economy and that a rise in the general price of…

Background: Some years back policy makers in the Kingdom of Bahrain were faced with rising inflation caused by the fall in the value of the US dollar relative to other currencies. The Kingdom’s currency unit, the Bahraini dinar (BD), is pegged to the dollar, so when the dollar goes down in value the BD goes down as well. A weaker dollar/dinar means that anything and everything Bahrainis buy from overseas cost them more dinars. The dramatic fall in the dollar/dinar essentially made all Bahrainis poorer in terms of what their money would buy. To soften the effect of the peg the government agreed at the time to give each low-income Bahraini household (but not non-Bahraini residents, who represent 52.7% of the Kingdom’s population and 70%-plus of its workforce) BD50 (equal to $133) monthly to make it easier to buy what food and other necessities.  We can’t forget, however, that inflation can be caused by putting too much money into the economy and that a rise in the general price of…

Background: Some years back policy makers in the Kingdom of Bahrain were faced with rising inflation caused by the fall in the value of the US dollar relative to other currencies. The Kingdom’s currency unit, the Bahraini dinar (BD), is pegged to the dollar, so when the dollar goes down in value the BD goes down as well. A weaker dollar/dinar means that anything and everything Bahrainis buy from overseas cost them more dinars. The dramatic fall in the dollar/dinar essentially made all Bahrainis poorer in terms of what their money would buy. To soften the effect of the peg the government agreed at the time to give each low-income Bahraini household (but not non-Bahraini residents, who represent 52.7% of the Kingdom’s population and 70%-plus of its workforce) BD50 (equal to $133) monthly to make it easier to buy what food and other necessities.  We can’t forget, however, that inflation can be caused by putting too much money into the economy and that a rise in the general price of…

Question: In an economy experiencing stagflation, characterized by simultaneous high inflation and high unemployment, which of the following policy combinations would most likely exacerbate the situation? a) Increasing government spending and reducing interest rates b) Decreasing government spending and increasing taxes c) Implementing tight monetary policy and expanding fiscal policy d) Raising interest rates and reducing government spending

Q1- Explain what researchers have found on the costs and benefits of inflation?

Economic

26. IMPACT OF DEVALUATION The inflation rate in Yinland was 14 percent last year. The government of Yinland just devalued its currency (the yin) by 40 percent against the dollar. Even though it produces products similar to those of the United States, Yinland has much trade with the United States and very little trade with other countries. It presently has trade restrictions imposed on all non-U.S. countries. Will the devaluation of the yin increase or reduce inflation in Yinland? Briefly explain.