A monetary policy target is a variable that O the Fed can affect directly. O equals one of the Fed's main policy goals. O the Fed has no ability to change. O the Fed cannot affect directly.
Q: If the probability of losing your job remains good time to purchase a home because the Fed usually a…
A: Correct : low, lowers
Q: d) Taxes decrease and at the same time the Fed increases the RRR
A: d. Taxes decrease and at the same time FED increases the RRR Primarily as a result of their…
Q: (Policy Lags) What lag in discretionary policy is described in each of the following statements? Why…
A: Time lags refer to the time delay, that is, the time gap between the execution of the policy and its…
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A: As Given: C=200+0.25(Y-T)I=150+0.25Y-1000iT=200 Equilibrium value of C and I can be calculated by…
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A: A delay between economic activities and the different consequences in the economy is referred to as…
Q: Gives correctly explanation in detail Q)Explain when would the Fed want to carry out a monetary…
A: The money supply is the supply of currency, coins, or deposits by the central bank of the country.…
Q: Use the following information for this problem: Goods Market: Asset Market: C = 3+0.5(Y-T) MS =…
A: C = 3+0.5(Y-T) MS = 25/P Assume that the P=1 initially I = 12-50r MD = Y - 50r T = 10 G = 10
Q: D) If the Fed sets the money supply at the same time as people are setting prices, so that everyone…
A: The rational expectations theory posits that people base their choices on human rationality, data…
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Q: By lowering the interest rate, the Fed makes it _______ costly for the banks to borrow monetary…
A: Answer: Correct option: A (less; falls) Explanation: If the Fed lowers the interest rate then the…
Q: If the economy is experiencing recession, the Federal Reserve should O Sell government securities O…
A: Monetary policy is the policy of the central bank through which the central bank aims to control the…
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A: Inflation and unemployment are negatively related. Higher inflation leads to decrease in…
Q: If the Federal Reserve pursues contractionary monetary policy, O the price level will fall and the…
A: A contractionary policy is a part of monetary policy where the central bank reduces the money supply…
Q: Which of the following statements is true? O The Fed has chosen the interest rate as its target…
A: When Fed uses monetary policy target then both money supply and interest rate cannot be used…
Q: When the Fed implements policy to prevent problems before they happen, it is called policy. O…
A: In the United States, Fed implements economic policies to deal with market uncertainties or market…
Q: When the economy is in recession and the Fed wants to do expansionary policy, explain what all 4…
A: In the United States, Fed is the central bank who performed Monetary policies to deal with business…
Q: with a decrease in the interest rate. If the Fed has a strong preference for stable prices relative…
A: When the Fed has a strong preference for stable prices, the Fed sees a price rise, which responds…
Q: The Fed’s target for the federal funds ratea. is an extra policy tool for the central bank,…
A: ANS Federal funds rate is the rate at which one commercial bank lends its excess reserves to another…
Q: If the Fed unexpectedly shifts to a more restrictive monetary policy, which of the following will…
A: A decrease in the money supply or the increment in the short-term interest rates constitutes a…
Q: Suppose the Fed decides to implement expansionary monetary policy. This will likely result in a…
A: Answer: (1). Increase in money supply (2). Decrease in the interest rates Explanation: Suppose the…
Q: Use the monetary approach to answer each of the following. Be sure to spell out your assumptions…
A:
Q: Given the graph below the Fed will use monetary policy to interest rates and aggregate demand. Price…
A: In the given graph, the economy is producing more than its potential which generates an inflationary…
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A: Fiscal policy refers to the actions taken by the government to interfere in the economy. Monetary…
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A: The money supply is the supply of currency by the central bank in an economy. It regulates the money…
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A: Federal Funds Rate(FR) is the rate of interest target set by the FOMC at which all the commercial…
Q: Suppose the U.S. economy is initially at long run equilibrium, when there is an unexpected large…
A: When the U.S economy is in long-run equilibrium and the government spending falls unexpectedly, the…
Q: If the Bank of Canada believes the economy is about to fall into recession, what actions should it…
A: Hi. Since there are two questions, we will answer the first one. Recession is defined as a…
Q: When the Fed decreases the discount rate, banks are likely to their lending anc the money supply O…
A: The answer is- B) increase, increases When the fed decrease the discount rate, banks are likely to…
Q: The Federal Reserve will lose money as a lender of last resort if Select one: O a. financial…
A: Federal Reserve is the central bank of United States of America and thus, is responsible for…
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A: An investor is an individual who puts their money in the business, bonds, equity, or other financial…
Q: In the market for reserves, if the Federal Reserve Bank increases the required reserve ratio, this…
A: Required reserve ratio:- A required reserve ratio can be explained as the percentage of assets which…
Q: M1 and M2 are examples of monetary aggregates. What is the definition of a monetary aggregate? O a…
A: Money Supply: - In an economy, the total value of money in circulation at a point in time is known…
Q: The Fed believes if inflation is high and GDP is high, unemployment is likely to: a. Increase…
A: Unemployment, the state of one who is equipped for working, effectively looking for work, however…
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A: In an economy, the aggregate demand curve is the representation of total demand for output in the…
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A: Monetary and fiscal policy are used to bring the economy to full employment.
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A: Monetary base is a measure of money supply that includes only notes in circulation,the most liquid…
Q: C) illustrate the impact of an expansionary monetary policy on the inflation rate and the price…
A: Monetary policy is the policy measures taken by central bank of country and with the help of…
Q: Suppose the U.S. economy is initially at long run equilibrium, when there is an unexpected economic…
A: When the U.S economy is in long-run equilibrium and there is an unanticipated economic boom across…
Q: If inflation is a threat, then the Fed will conduct monetary policy aimed at the interest rate which…
A:
Q: What would be a way for the Federal Reserve to stimulate an economy that is sluggish? O A. print…
A: An economy is considered to be in a sluggish state when the rate of growth is slow, flat, or…
Q: Assume also that the Fed is just concerned with returning the inflation rate to 2% whenever it…
A: The Federal Reserve System (or the Fed) is the national bank and money related power of the United…
Q: True or False: To return the economy to the natural rate of output, the Fed could sell government…
A: True or False: In the given scenario, the economy is in recession with lower level of unemployment…
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- tion 9 Unsaved The Federal Reserve expands the money supply by 5%. In the long run in this scenario, is money neutral? Money is always neutral in the long run. Money is never neutral in the long run. While there might be scenarios in which money is not neutral in the long run, this scenario is one in which money is neutral. Money is neutral in the long run in this scenario if lower interest rates lead to investment but that investment does not successfully create capital. If the investment is successful, money is not neutral in this scenario.Question 222 which two of the TEN PRINCIPALS OF ECONOMICS imply that fed can profoundly affect the economy? explain how these mechanisms work in 6 sentences with examples.The Chairman or Chairlady or Fed Chair (a politically correct term) of the Federal Reserve Bank has the power to override the votes of the FOMC and can independently carry out the monetary policy that they want as an individual. The FOMC is merely an advisory board to the Fed Chair. The FOMC has no real power, it's the Fed Chair (currently Jerome Powell) who has 100 percent of the power over U.S. monetary policy.
- Economics If the Fed increases the money supply by 0.5%, will the value of money increase or decrease? Will the price level increase or decrease? Illustrate with a graph. (b) Now suppose the demand for money decreases. Does this result in inflation or deflation? Explain.1. The FED is facing a problem of inflation. What policy should be used? How would each of the tools at the FED's disposal be used? 2. The FED is facing a problem of unemployment. What policy should be used? How would each of the tools at the FED's disposal be used?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."
- 3 In Friedman's theory, money demand is a function of a. average past income, current inflation, return on bonds, return on equities b. permanent income, expected inflation, return on money, return on bonds, return on equities c. return on bonds, return on inflation, return on equities, return on stock d. current income, expected inflation, return on money, return on bonds, return on equitiesIf 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. )H3. Which of the following statements is true regarding the Federal Reserve? Group of answer choices The Fed was generally ineffective before the late 1980's because it engaged in pro-cyclical monetary policies. The Fed was ineffective because of did not know about open market operations (OMO). The Fed's switch from pro-cyclical to anti-cyclical monetary policy played an important role is decreasing macroeconomic volitivity. All of the above are true.
- 1. By having such an influence on the economy, the Fed also indirectly affects your home's value and even your chances of being laid off or rehired. True False. Give correct typed explanation.Use the following information for this problem: Goods Market: Asset Market: C = 3+0.5(Y-T) MS = 25/P; assume that the P=1 initially I = 12-50r MD = Y - 50r T = 10 G = 10 Suppose that when the economy is in the Short Run equilibrium (hand draw a new graph starting at the Short Run) the Federal Reserve wants to conduct a stabilization policy. What is the policy they would use called? Show graphically how they would stabilize.i need help qith the last 2 questions Suppose the U.S. economy is initially at long run equilibrium, when there is an unexpected economic boom across Europe in the country.How does this impact the U.S. economy? (write out either "inflationary" or "recessionary"inflationary In response to this what monetary policy would the Fed employ? (write one of the following: "raise taxes", "lower taxes", "raise money supply", or "lower money supply"lower money supplyWhat is the most likely way the Fed will accomplish this change in the monetary policy? (write one of the following: "buy securities", "sell securities", "raise discount rate", "lower discount rate", or "legislation"sell securitiesThis action by the Fed will cause interest rates to _______. (Write out "increase" or "decrease"The end result of the monetary policy is a shift of which curve in which direction. (Write out one of the following: "AD right", "AD left" "AS left", "AS right"