ECON 3K03 Assignment 2

* Question 21 The Federal Reserve changes the reserve requirement to meet monetary policy goals. What is a reserve requirement? the taxes that banks are required to pay to the government В the interest rate that the federal reserve charges on its loans C the interest rate that the federal reserve pays on bank deposits with the institution the percentage of customer deposits that banks must maintain possession of ©2021 Illuminate Education TM, Inc.

Identify a newspaper article from Trinidad and Tobago that provides a situation in which a contractionary monetary policy was implemented by the central bank. Ensure that you provide a screenshot of the article in your submission. The screenshot should include the name of the publication, date of publication and name of the article.(i) Identify the contractionary monetary policy used in the article. (ii) Carefully explain, in as much detail as possible, how the chosen action from the article will impact the money market. (iii) Illustrate using the money market diagram, the overall impact of the chosen action from the article on the money market.

Q3

Subject  :- Economy

Questıon One Zambia has adopted an inflation targeting framework to manage its monetary policy. Using your knowledge of money and banking, elaborate on the key features of the inflation targeting framework and also bring out the positives and negative aspects of such a framework. What key gaps can you isolate that exist in the conduct of inflation targeting for Zambia?   You have been appointed as Chief Executive Officer for one of the largest Banks in Zambia. As your first task, you will need to review the Bank’s credit management policies. Based on the paper by George Akerlof on the “Market for Lemons”, write an advisory note (no more than one page) on how the bank can address the challenges of information Asymmetry, Adverse Selection and the Moral Hazard problem in the context of a commercial bank. Ensure to provide practical examples in your illustration.

Identify a newspaper article from Barbados that provides a situation in which a contractionary monetary policy was implemented by the central bank. Ensure that you provide a screenshot of the article in your submission. The screenshot should include the name of the publication, date of publication and name of the article.(i) Identify the contractionary monetary policy used in the article. (ii) Carefully explain, in as much detail as possible, how the chosen action from the article will impact the money market. (iii) Illustrate using the money market diagram, the overall impact of the chosen action from the article on the money market.

Macroeco discuss

Question 22(Multiple Choice Worth 1 points) (05.03 MC) Assume that an economy is characterized by its efficient use of available human resources. The central bank of this economy enacted the expansionary monetary policy that influences the available money supply. Which of the following is true in this scenario? OA decrease in the money supply will increase the price level, but the output will remain unaffected. OA decrease in the money supply will increase the price level, but the output will decrease. O An increase in the money supply will decrease the price level, but the output will increase. O An increase in the money supply will decrease the price level, but the output will remain unaffected. OAn increase in the money supply will increase the price level, but the output will remain unaffected.

Question 26 What is the main purpose of monetary policies? reducing government spending in the economy controlling the supply of money in the economy C reducing government intervention in the economy controlling the production of goods in the economy ©2021 Illuminate Education TM, Inc.

Question: What is the role of the federal funds rate in monetary policy, and how does the central bank use this rate to influence the economy? A) The federal funds rate has no impact on monetary policy. B) The federal funds rate is the interest rate at which banks lend reserves to each other overnight, and the central bank adjusts this rate to influence borrowing costs, spending, and overall economic activity. C) The federal funds rate is the interest rate at which banks lend to consumers, and it is controlled by the government. D) The federal funds rate determines government spending levels.

Paying Interest on Reserves-Problem Solving Exercise 3 (Algo) The U.S. economy is experiencing a recession. In order to smooth the economy the Federal Reserve would like to adjust the interest rate it pays on reserves. If the Fed has a goal of increasing the money supply by $25 billion, what should the change in excess reserves be if the reserve requirement is 10%? Instructions: Enter your answer as a positive number rounded to two decimal places. Excess reserves will need to (Click to select) by $ billion.

Please answer question 4:

The central bank in Jamaica decides to pursue an expansionary monetary policy. (i) Identify one possible action they could take. (ii) Carefully explain, in as much detail as possible, how the chosen action will impact the money market.

Continued monetary tightening 05 October 2022 The Monetary Policy Committee today increased the Official Cash Rate (OCR) to 3.5% from 3.0%. The Committee agreed it remains appropriate to continue to tighten monetary conditions at pace to maintain price stability and contribute to maximum sustainable employment. Core consumer price inflation is too high and labour resources are scarce. Global consumer price pressures remain heightened. The global demand for goods and services is exceeding supply capacity, putting upward pressure on prices. Food and energy prices are being particularly exacerbated by the war in Ukraine. A recent decline in oil prices and an easing in some supply-chain constraints have seen headline inflation measures fall in some countries. However, core measures of inflation have risen and persist. Central banks are tightening monetary conditions, implying a weaker growth outlook for New Zealand's trading partners. In New Zealand, the level of domestic spending has…

Continued monetary tightening 05 October 2022 The Monetary Policy Committee today increased the Official Cash Rate (OCR) to 3.5% from 3.0%. The Committee agreed it remains appropriate to continue to tighten monetary conditions at pace to maintain price stability and contribute to maximum sustainable employment. Core consumer price inflation is too high and labour resources are scarce. Global consumer price pressures remain heightened. The global demand for goods and services is exceeding supply capacity, putting upward pressure on prices. Food and energy prices are being particularly exacerbated by the war in Ukraine. A recent decline in oil prices and an easing in some supply-chain constraints have seen headline inflation measures fall in some countries. However, core measures of inflation have risen and persist. Central banks are tightening monetary conditions, implying a weaker growth outlook for New Zealand's trading partners. In New Zealand, the level of domestic spending has…

Continued monetary tightening 05 October 2022 The Monetary Policy Committee today increased the Official Cash Rate (OCR) to 3.5% from 3.0%. The Committee agreed it remains appropriate to continue to tighten monetary conditions at pace to maintain price stability and contribute to maximum sustainable employment. Core consumer price inflation is too high and labour resources are scarce. Global consumer price pressures remain heightened. The global demand for goods and services is exceeding supply capacity, putting upward pressure on prices. Food and energy prices are being particularly exacerbated by the war in Ukraine. A recent decline in oil prices and an easing in some supply-chain constraints have seen headline inflation measures fall in some countries. However, core measures of inflation have risen and persist. Central banks are tightening monetary conditions, implying a weaker growth outlook for New Zealand's trading partners. In New Zealand, the level of domestic spending has…

Continued monetary tightening 05 October 2022 The Monetary Policy Committee today increased the Official Cash Rate (OCR) to 3.5% from 3.0%. The Committee agreed it remains appropriate to continue to tighten monetary conditions at pace to maintain price stability and contribute to maximum sustainable employment. Core consumer price inflation is too high and labour resources are scarce. Global consumer price pressures remain heightened. The global demand for goods and services is exceeding supply capacity, putting upward pressure on prices. Food and energy prices are being particularly exacerbated by the war in Ukraine. A recent decline in oil prices and an easing in some supply-chain constraints have seen headline inflation measures fall in some countries. However, core measures of inflation have risen and persist. Central banks are tightening monetary conditions, implying a weaker growth outlook for New Zealand's trading partners. In New Zealand, the level of domestic spending has…

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

QUESTION 3 Suppose the Fed's monetary policy follows the following Taylor rule: /= + 0.02 + B×y+Bx(n-0.02) where is inflation, y is the percentage deviation of output from its full-employment level and 8=0.71. According to the Taylor rule, if output is 2% above its full-employment level and inflation is 4%, the Fed should set the Fed funds rate to_%. (Submit your answer with up to two decimals and in percent terms, i.e., 10.22 for 10.22% and 11.44 for 11.442%.)

The central bank of Trinidad and Tobago decides to pursue an expansionary monetary policy. (i) Identify one possible action they could take. (ii) Carefully explain, in as much detail as possible, how the chosen action will impact the money market. (iii) Illustrate using a diagram to show the overall impact of the chosen action on the money market.

ONLY QUESTION 2 The central bank of the country is concerned about the possibility that the country is going to face a high inflation rate, and it adopted a contractionary monetary policy as a result. Analyse how the central bank policy will affect the market for bonds: price, demand, and supply of bonds (hint: refer to relationship between the interest rate and the price of bonds).  Using a graph of the money market, discuss how it will affect the demand for and the supply of money. Analyse the process of achieving equilibrium in the money market.