130 120 110 100 + If the Fed fears inflation, it by OA. decreases aggregate supply; selling OB. decreases aggregate supply; buying OC. decreases aggregate demand; selling D. increases aggregate demand; selling OE. increases aggregate supply; buying government securities. A AS* AS₂ *****
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- a. A decrease in government spending. b. An increase in investor confidence. c. A fall in the Fed’s target inflation rate. d. A beneficial supply shock. e. A fall in people’s expectations of inflation.Explain The FED's inflation TargetThe Fed’s target for the federal funds ratea. is an extra policy tool for the central bank, inaddition to and independent of the money supply.b. commits the Fed to set a particular money supplyso that it hits the announced target.c. is a goal that is rarely achieved because the Fedcan determine only the money supply.d. matters to banks that borrow and lend federalfunds but does not influence aggregate demand.
- The Fed is fighting recession and it happens to overstimulate the economy. If the expected inflation rate rises above the 2 percent goal, what is the cost of returning the inflation rate back to its goal? The cost of returning the inflation rate back to its goal is _______. A. an inflationary gap and an even higher inflation rate than initially B. unemployment below the natural unemployment rate C. a decrease in potential GDP and aggregate supply D. a recessionary gap and a higher unemployment rate Thanks!The Fed is fighting recession and it happens to overstimulate the economy. If the expected inflation rate rises above the 2 percent goal, what is the cost of returning the inflation rate back to its goal? The cost of returning the inflation rate back to its goal is _______. A. an inflationary gap and an even higher inflation rate than initially B. unemployment below the natural unemployment rate C. a decrease in potential GDP and aggregate supply D. a recessionary gap and a higher unemployment rateThe NBER says the economy went from a peak in December 2007 to a trough in June 2009, until hitting a peak in the fourth quarter of 2019, then a trough in April 2020, and improving since then. Given this description of the dates of the business cycle, does the Fed’s policy of changing the discount rate make sense? Why or why not? Only typed answer and don't use chat gpt to solve the problem
- The Fed's target for the federal funds rate A)is a goal that is rarely acheived because the fed can determine only the money supply B) is an extra policy tool for the central bank, in addition to and independent of the money supply C) commits the fed to set a particular money supply so that it hits the annouced target D) matter to banks that borrow and lend federal fund but does not influence aggregate demand.The Fed believes if inflation is high and GDP is high, unemployment is likely to: a. Increase b. Decrease c. Remain the same d. InvertWith a policy of nominal GDP targeting, if the Fed expected 6% growth in real GDP and wanted an inflation rate of 2%, it would set a target for nominal GDP growth of 8% per year. True False
- If the fed orders a contractionary monetary policy, describe what will happen to the following variables relative to what would have happened without the policy: 1. Net exports 2. The price level. Please type out the correct answer with step by step proper explanation of it . Will give you upvote only for the correct answer.(need answer in 50 min max. )The Fed is expected to raise the interest rate to nearly 5% in 2023. What is the impact of this policy on inflation and stock market? a. Inflation increases and stock prices increase b. Inflation increases and stock prices decrease a. Inflation decreases and stock prices increase b. Inflation decreases and stock prices decrease1).True or False: If the Fed undertakes expansionary monetary policy, it can retum the economy to its original inflation rate and original unemployment rate. 2).True or False: If the Fed undertakes expansionary monetary policy, it can return the economy to its original inflation rate and original unemployment rate. True False