Q: Explain, what kind of monetary policy can be used to fight against recession and depression.
A: The Fed is also known as central bank, which aims to promote economic stability by controlling the…
Q: 5. An economy is facing the recessionary gap shown in the accompanying diagram. To eliminate the…
A: A recessionary Gap is a circumstance wherein the genuine GDP is lower than the possible GDP at the…
Q: “The independence of the central bank has meantthat it takes the long view and not the short view.”…
A: Liberty of central (reserve) banks, explains the capability to set policy (monetary) instruments in…
Q: Explain, using diagrams, how keynesian monetary transmission works if there is a decrease in money…
A: The monetary transmission mechanism is the method by which monetary policy choices affect asset…
Q: . Why does expansionary monetary policy causes interest rates to drop?
A: Interest rates are determined at the point where the demand for money in the economy equals to…
Q: ng recession
A: Monetary policy involves the actions being undertaken by the central bank of a nation in order to…
Q: e the channels through which the cash rate influences Monetary pol
A: Official money rate (OCR) is the pace of interest charged by the national bank on for the time being…
Q: As a member of the FOMC, Write a directive to the committee about the conduct of monetarybpolicy…
A:
Q: 6/An economy is facing the inflationary gap shown in the accompanying diagram. To eliminate the gap,…
A: The central bank conducts the monetary policy by adjusting the money supply by conducting open…
Q: b) Explain the type of monetary policy used by central banks to overcome global recession.
A: A critical job of central banks is to direct monetary policy to accomplish value soundness (low and…
Q: a. Which graph below depicts the Keynesian view of the money market? Which is the monetarist view? A
A: a. Keynesian view is that money demand is elastic. Graph A Monetarist view is that money demand is…
Q: What economic conditions would result in a very steep IS curve? Briefly explain.
A: "Since you have asked multiple questions, we will solve first question for you .. If you want any…
Q: The monetary base increased by 20% during the contraction of 1929-1933, but the money supply fell by…
A: The monetary base increased by 20% during the contraction of 1929-1933, but the money supply fell by…
Q: Explain through three monetary instruments how can the Central Bank reduce unemployment ratio?
A: Monetary policy is used by central banks to control the amount of money in a country's economy. A…
Q: What are the objectives of monetary policy? and what are the goals of monetary policy in harmony or…
A: Monetary policy is defined as the process by which central bank of the country and manage supply of…
Q: hat kind of monetary policy can be used to fight against recession?
A: Monetary policy delineates the policy framework of the monetary authority of the economy. It…
Q: What is the basic objective of monetary policy? What are the major strengths of monetary policy? Why…
A: The monetary policy is used by the monetary authority or the central bank of the nation. There are…
Q: a. What effect on Monetary Base when Foreign Central Banks increase account at the Fed?
A: The amount of currency in circulation in the economy is referred to as the monetary basis. It is…
Q: Which of these actions shows an expansionary monetary policy? d Decrease of the minimum required…
A: Monetary policy refers to change in supply of money in the economy.
Q: Inwhat ways might monetary policy be superior to fiscal policy? In what ways might it be inferior?
A: The economy is bagged by two policies that are the monetary and fiscal policies, which are the most…
Q: Whys is the actual Money Multiplier less than the potential Money Multiplier?
A: In an economy, money multiplier is used to understand the change in actual money supply due to…
Q: 7. Economic commentators have pointed out that demand for money in a developed country is projected…
A: Money Demand: - The demand for money is the individual's desire to keep their assets in the form of…
Q: If a central bank uses the tools of monetary policyto reduce the demand for goods and services,…
A: Monetary Policy: This policy is operated by the Federal Reserve. The monetary authority under this…
Q: What are some other sepcific times the FED has used this monetary policy on the economy?
A: Monetary policy refers to the tool which is used by central bank in order to increase or decrease…
Q: The _____ oversee(s) the main tool of monetary policy. a. Congressional Budget Office b. 12…
A: * ANSWER :- (4) From above information the answer is provided below as
Q: 2.3.1 The monetary transmission mechanism can be depicted in the form of a graph or using symbols.…
A: The monetary transmission mechanism can be defined as the mechanism through which demand of the…
Q: Which of the following is an example of a contractionary monetary policy? a. a decrease in the…
A: Contractionary monetary policy refers to decrease in money supply.
Q: Summarize the threemotives underlyingthe liquidity preference theory of moneydemand
A: The Liquidity Preference(LP) Theory of money demand for money states that the money's demand is not…
Q: 3. With the help of appropriate diagrams, explain the expansionary monetary policy and its…
A: Expansionary monetary policy refers to an action taken by the monetary authority or the central bank…
Q: How would an unexpected change in the equilibriumreal fed funds rate be an argument against using…
A: Answer - Taylor rule :- It is the formula which help fed to how to change the interest rates while…
Q: 13. Which of the following is considered to be a relatively weak tool of monetary policy? *
A: GIVEN the following is considered to be a relatively weak tool of monetary policy IS
Q: Why is the composition of the Fed’s balance sheet apotentially important aspect of monetary policy…
A: The Central bank plays a dominant role during economic crisis. It implements monetary policy to…
Q: 49) Which of the following sequence of events follows an expansionary monetary policy? A) ↑ =7 = ADĮ…
A: In Expansionary monetary policy one of tool is to lower the rate of interest.
Q: a, calculate the amount of the monetary base: illion antity of the money supply: h io of reserves to…
A: DISCLAIMER “Since you have asked multiple question, we will solve the first question for you. If you…
Q: Ron Paul, a former member of Congress, believes that our central bank has benefited the U.S.…
A: The Federal Reserve in the U.S was created on 23rd December 1913. It is the central bank of the U.S.…
Q: Why does contractionary monetary policy cause interest rates to rise?
A: Contractionary monetary policy was used to decrease the money supply in an economy.
Q: Why were monetary policy responses ineffective during the Great Depression?
A: The great depression was characterized by the fall in the aggregate demand. The fall in aggregate…
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- Suppose that the government decides to increase government expenditure. a) Is this a fiscal or a monetary policy? b) Is this an expansionary or a contractionary policy? c) How will the equilibrium output and interest rate change in goods and money markets, respectively. Explain using the diagrams.In an economy, the money supply growth rate is 5.0%, the equilibrium real interest rate is 1.5%, the potential growth rate is 4.0%, the economic growth rate is 1.0%, the inflation rate is 3.0%, the unemployment rate is 4.5%, and the rate of increase in the circulation speed is -2%. In this case, in an economy that pursues an inflation target of 2.0%, what is the appropriate interest rate target based on Taylor's rule? (Omit the unit and answer with the first decimal place.)In an economy where the central bank implements negative interest rates as a monetary policy tool, what is the most likely short-term impact on consumer savings behavior and bank profitability? A. An increase in consumer savings as people seek to safeguard their money and a rise in bank profitability due to increased lending. B. A decrease in consumer savings as the incentive to save diminishes and a decrease in bank profitability due to lower interest margins. C. No significant change in consumer savings behavior but an improvement in bank profitability due to lower borrowing costs. D. A shift in consumer investment towards riskier assets and challenges in bank profitability due to compressed interest margins. Please don't use chatgpt it is giving wrong answer and please provide valuable answer
- Give typing answer with explanation and conclusion A standard "money demand" function used by macroeconomists has the form ln(m)=β0+β1ln(GDP)+β2R, Where m is the quantity of (real) money, GDP is the value of (real) gross domesticproduct, and R is the value of the nominal interest rate measured in percent per year. Supposed that β1 = 2.66 and β2 = −0.05. A) What is the expected change in m if GDP increases by 4%? The value of m is expected to_________(increase or decrease ) by approximately ________% (Round your response to the nearest integer) B) What is projected to change in m if the interest rate increases form 2% to 6% ? The value of m is expected to ________(increase/decrease) by approximately ________% (Round your response to the nearest integer)6. a. Use an MP curve and AS/AD graph to show that if the economy is hit by a large negative shock, it can go below the zero lower bound and end up in a deflationary spiral. b. What can the monetary policy authorities do to reverse the effects of the negative shock depicted in part (a)? Use an MP curve and AS/AD graph to explain.On June 5, 2003, the European Central Bank acted to decrease the short-term interest rate in Europe by half a percentage point, to 2 percent. The bank’s president at the time, Willem Duisenberg, suggested that, in the future, the bank could reduce rates further. The rate cut was made because European countries were growing very slowly or were in recession. What effect did the bank hope the action would have on the economy? Be specific. What was the hoped-for result on C, I, and Y?
- Which monetary policy tool can the Federal Reserve use to conduct an expansionary monetary policy (please state at least one instrument)? Which monetary policy instrument can the Fed use to conduct a restrictive monetary policy? Assume the country is experiencing high unemployment and a recession, such as during 2001, 2008-2009, and 2020. What is the Fed likely to do in this scenario? Discuss the effects of such policy on the economy. Can you give a specific example to what the Fed did during any of those recessions?1. The macroeconomy of a certain country is described by the following set of equations: Consumption: C = 0.8(Y − T) + 30 Investment: I = −2r + 40 Government expenditure: G = 30 Tax: T = 0.25Y + 20 The equilibrium condition of the monetary market is: 60/P= 0.8Y − 8r + 36 When P =1/3, how much is the equilibrium national income? A. 100 B. 200 C. 300 D. 400 E. None of the above 1-2. Please show the equation of the total demand. (In the form of “Y =…”) A. Y =25/P+ 125 B. Y =50/P+ 125 C. Y =25/P+ 250 D. Y =50/P+ 250 E. None of the above 2. Suppose we are considering a Solow Model without technology progress. Y=K3/4L1/4 Population growth rate=0.03 The capital accumulation is sY-dK s=0.2, d=0.07 Please calculate the capital per capita under the steady state. A. 20 B. 24 C. 8 D. 4 E. 12 F. 16 2-1. Please calculate the marginal product of labor at the steady state. A. 2 B. 1/2 C. 4 D. 8 E. 1 F. None is correct.In the monetary intertemporal model, assume that money supply is always fixed. Suppose that there is an increase in real wage. How does this change affect interest rates (both real and nominal), price level, employment, total factor productivity and equilibrium output? Carefully explain your answers. b) Suppose that, in a liquidity trap, bank reserves are less liquid than government debt. If the Central Bank conducts an open market purchase of government debt, what is the effect on price level? Use an appropriate set of diagram to explain your answer.
- explain if the central bank pursues targeting the interest rate, it is likely to lossse control over a monetary aggregate.Consider an economy described by the following equations. Y= C + I + GC= 100 + .75 (Y - T)I= 500 - 50rG= 125T= 100 Where: Y is GDP, C is consumption, I is investment, G is government spending, T is taxes and r is the rate of interest. Answer the questions based on the following equations above. a. What is the value of the multiplier? b. What is the equilibrium equation for Y? Show your solution. c. Suppose the Central Bank policy is to adjust the money supply to maintain the interest rate at 4 percent, so r=4. What is the value of output? Show your solution. d. Assuming that no change in fiscal policy, what is the effect of a reduction in interest rate from 4 percent to 3 percent on equilibrium output. Show your solution. e. In this case, explain the policy that was used by the policymaker to target the aggregate demand.Briefly explain (1) Why are the real interest rate and the aggregate expenditure inversely related? (2) Why is the monetary policy reaction curve upward, instead of downward, sloping?