Discuss the implications of the central bank’s changing approach on price stability.

Q: Explain and show graphically how a positive supply shock, followed by a more restrictive monetary…

A: Answer-

Q: Explain the advantages and disadvantages of monetary policy and macroprudential policy in dealing…

A: Asset Price Bubble occurs whenever the price of an asset such as real estate, bonds, commodities,…

Q: Distinguish between the Keynesian theory and the neoclassical theory of money demand

A: There are different types of theories of demand for money in economics as per the time period. The…

Q: Why would a central bank implement a monetary policy when the inflation level is higher than…

A: The economies tend to have many entities with them, all of which are concerned with performing…

Q: Which of the following is one of the challenges facing modern monetary policy makers? how to react…

A: The monetary policy of the economy is the policy of the central bank regarding the money supply of…

Q: A dull Reserve Bank meeting may be a good thing As markets get jittery about inflation and interest…

A: A central bank can use following instruments to stabilise interest rates  1) Open market operations…

Q: Which of the following characterizes intermediate targeting by central banks O increasingly, central…

A: Intermediate target are those targets achieved by central bank which focuses on exact measures…

Q: Suppose the Central Bank of Bothnia buys Treasury Bonds. What will be the impact on the price level…

A: The fiscal and monetary policies are used by the government to achieve certain economic goals. The…

Q: What do economists mean when they say that monetary policy can exhibit cyclical asymmetry? Why is…

A: Cyclical asymmetry alludes to the condition that a tight monetary policy (strategy) is generally…

Q: Read the following extract and answer question? A dull Reserve Bank meeting may be a good thing. As…

A: Domestic interest rates and aggregate demand have inverse relationship.

Q: discuss how money supply is determine by the central bank and economics activities

A: Money : Money is something which is used to make transactions and which earns no interest. This…

Q: A dull Reserve Bank meeting may be a good thing As markets get jittery about inflation and interest…

A: According to monetarist, inflation is always and everywhere a monetary phenomenon. Milton Friedman…

Q: How might the response of a central bank to an external inflation shock depend upon the way that the…

A: Inflation Shock:- An inflationary shock occurs if commodity prices rise unexpectedly (e.g., as a…

Q: Name three (3) policy tools that a Central bank can use to constrain the rate of inflation and…

A: The central bank of any country can decrease the money supply (contractionary monetary policy) to…

Q: What interest rate essentially serves as the ceiling on how high the federal funds rate can go? What…

A: Banks are required to keep a required amount of reserves with them, known as required reserves. "The…

Q: Explain in detail the process of Monetary Policy transmission of a decrease in the cash interest…

A: Meaning of Monetary Policy (Monetary Measures): Monetary policy is the policy of the government…

Q: Discuss the effects of expansionary and contractionary monetary policy on real GDP and the price…

A: Monetary policy is the policy of the central bank of the economy to control the money supply in the…

Q: Using a money market, a causal chain, and the Macro model, describe and show how expansionary…

A: The money market is the component of the economy which provides the short term funds and loans to…

Q: What explanations have Post-Keynesians forwarded for the comparative failure of Central Banks policy…

A: A financial crisis is an economic term. A financial crisis is a situation where there is a sharp…

Q: Explain the main theories of central bank behaviour.

A: Main theories of central bank behavior 1)Monetary stability For monetary stability,central bank may…

Q: Explain what kind of monetary policy and fiscal policy tools can be used to fight against inflation

A: Monetary Policy The goal of the monetary policy is to influence the money supply in the economy to…

Q: Which of the following is NOT a requirement in selecting a policy instrument?   Question 4 options:…

A: Policy instruments refer to a link between the formulation of policy and the implementation of…

Q: Explain the type of policies a central bank can implement to raise the interest rate

A: The goal of the monetary policy of the central bank is to control the amount of money in the…

Q: The primary function of central banks is to: Answer a. Increase risk and volatility to increase…

A: In macroeconomics, the government and the central bank plays a very important role in stabilizing…

Q: One of the advantages monetary policy in relation to fiscal policy is that:   a. It is easier to…

A: Monetary policy : The Monetary policy of the central bank of a country is to control money supply…

Q: If the money demand function is unstable and undergoes substantial, unpredictable changes, then the…

A: Money supply does not give that much information regarding money demand function.Interest rates…

Q: “A central bank with a dual mandate will achieve lower unemployment in the long run than a central…

A: In long run, there exists no trade off between unemployment and inflation.

Q: The Bank of Sweden inflation target is 2 % - which is a very common central bank goal. Why is it not…

A: Inflation rate refers to the general rise in the inflation rate. The inflation rate is worrisome for…

Q: “If autonomous spending falls, the central bank shouldlower its inflation target in order to…

A: The central bank of an economy plays an important role to run an economy. It has a tool of monetary…

Q: define and explain the importance of inflation targeting

A: Inflation means rise in the general prices in the economy that is for selected bundle of essential…

Q: Answer the following guide questions. Based on the graph above. a.What happens to the aggregate…

A: Lowering of interest rates by the BSP will induce more money supply in the economy.  As money supply…

Q: Given the supply and demand shocks caused by the pandemic, expansionary monetary policy is called…

A: There are a few activities that a national bank can take that are expansionary financial strategies.…

Q: Identify the sources ofinflation and the roleof monetary policy inpropagating inflation.

A: Inflation is the increment in the overall price-level of the economy. There are different reasons…

Q: How can central banks improve their management of infation expectations?

A: Inflation refers to the increase in the price level of an economy. The inflation expectations are…

Q: Uncoventional monetary policy: financial policy and quantitative easing Suppose that the IS and LM…

A: Given information IS function: Y=C*(Y-T)+I*(Y, r+x)+G LM: r=r* C= consumption Y= income level Y= tax…

Q: what are the policy instruments used by the BSP and the corresponding policy rates?

A: BSP is the Central Bank of Philippines which deals with the Monetary Policy regulations in the…

Q: using economic concepts , discuss the impact of the following events on the equilibriumprice level…

A: Contractionary monetary policy is used by a central bank in order to slow down the economy, with the…

Q: Why is a public announcement of numerical inflationrate objectives important to the success of an…

A: Inflation targeting is central bank policy with an objective of setting inflation rate at a…

Q: What incentives arise for a central bank to fall into thetime-inconsistency trap of pursuing overly…

A: Assume the banking sector attempts to spur demand by expanding the money supply while the market is…