How does a delay in spending due to the uncertain political climate affect velocity and income?

Q: Is their possibility that money always neutral in a Neo-classical model of the macroeconomy?

A: Neo-classical: It refers to the theory of economics under which demand and supply are given…

Q: Use the AD-AS model to illustrate what the impact of an expansionary monetary policyinstrument  will…

A: Monetary policy refers to the central bank’s policy that bring necessary change in the different…

Q: Why do Keynesian economists believe increasing the money supply is a good idea? Use the equation of…

A: The equation of exchange gives a relationship between money supply (M), Velocity of money (V), Price…

Q: What is the effect on velocity if Congress outlaws the use of credit cards?

A: The term velocity refers to the number of times a dollar is used in economic transactions. It can be…

Q: Why does the Keynesian view of the demand for moneysuggest that velocity is unpredictable?

A: The velocity of money (V) is the rate at which money is exchanged in an economy for goods and…

Q: Which household is likely to have a higher MPC, a low income household or a high income household?…

A: In financial matters, the marginal propensity to consume is a metric that evaluates prompted…

Q: Define the term Liquidity?

A: Liquidity refers to the attribute of a market that allows an economic agent to trade an asset…

Q: an economy's policy makers be tempted to renege  or reverse an announcement they made earlie

A: Policymaker- the person who design policies.

Q: By using AD and AS Explain in graph the effect of using monetary policy when the economy is…

A: Aggregate demand (AD): - It is the total demand of goods and services in an economy at a particular…

Q: “If nominal GDP rises, velocity must rise.” Is this statement true, false, or uncertain? Explain…

A: The GDP is the summation of the money value of all the final goods and services produced within the…

Q: Why are Keynesians more likely to advocate expansionary monetary policy to eliminate a recessionary…

A: Recessionary gap means when the GDP of a nation is lower than the full employment level of GDP.…

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: investment and consumption expenditures fall and cause GDP to fall, what is an appropriate monetary…

A: Monetary policy is used by central bank to regulate the economy when there is inflation and…

Q: Do you agree with the idea that the contemporary world is characterized by high liquidity? Why or…

A: Liquidity: It is the simplicity with which a resource, or security, which can be changed over into…

Q: Which of the following is NOT an example of monetary policy to restrict aggregate demand? a)Raising…

A: In an economy, central bank uses different ways to influence aggregate demand according to the need…

Q: In the long run, a change in monetary policy will affect only the aggregate price level. True or…

A: The aggregate price level alludes to the general or total cost of the aggregate labor and products…

Q: How does the decision to reduce the policy rate impact the economy. Explain using the ISLM model…

A: The IS-LM model focuses on the equilibrium of the market for goods and services and for money…

Q: Can CDOs create a liquidity squeeze in the financial markets ?

A: A CDO is a financial instrument that rewards shareholders from a collection of revenue-generating…

Q: When the economy slows down heading towards a recession, then the appropriate monetary policy would…

A: During recession, the demand started to decline and unemployment started rising. Monetary policy is…

Q: If the Fed lowers the federal funds rate, the first effect in an AS/AD figure is a ________ shift of…

A:

Q: Suppose that government spending is increased at the same time when an autonomous monetary policy…

A: The aggregate supply is the total amount of services and commodities that firms in an economic plan…

Q: What happens in the AD-AS model when the Federal Reserve buys government securities?

A: Federal reserve is responsible for conducting monetary policy in an  economy. Open market operation…

Q: What is rational expectation? Explain why rational expectation implies a steeper short run…

A: Macroeconomics: It refers to the economics in which the study is being conducted, or those parts are…

Q: If credit cards were made illegal by congressional legislation, what would happen to velocity?…

A: Quantity theory of money states the price level and money supply are directly proportional to each…

Q: What are causes and effects of low policy rates

A: Causes of lower policy rates are:Supply and demandA decrease in the demand for credit will decrease…

Q: What is the relationship between the velocity of money and the Cambridge k ?

A: The Cambridge cash balance approach use K as the parameter that represent nominal income share which…

Q: How does an autonomous tightening or easing ofmonetary policy by the Fed affect the MP curve?

A: With an easing of monetary policy, some changes which are projected in monetary policy independent…

Q: How can an expansionary monetary policy could solve the problem of a decline in economy activity

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

Q: How does restrictive monetary policy affect the level of investment and consumption? Explain your…

A: The IS curve is a downward sloping curve, which reflects a negative relationship between the…

Q: The latest residential property price data from the Australian Bureau of Statistics show that…

A: monetary policy is the action taken by country's central bank in order to stabilise the money supply…

Q: What happens to the IS curve when the central bankdecides to raise interest rates to tighten…

A: When the central bank raises the interest rate, it discourages the investor to borrow funds as…

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: 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: Cite one limitation of monetary policy and make recommendation to address it.

A: Concept The central bank's monetary policy is the central bank's macroeconomic policy. It is a…

Q: What are likely changes in interest rates and inflation rates and how might these impact on the…

A: If there is inflation in an economy, then government takes measures to control the prices before it…

Q: Suppose that the Australian Economy is experiencing an inflationary gap. Draw an AE model diagram to…

A: The short run output would be determined by the intersection of the AD-AS curves. The long run…