If central Bank increases money supply at a rate that is higher than before , what will be the impact of that higher than required money growth?

Q: show that the friedman´s money equation is simply an extension of the general theory of demand for…

A: Quantity theory of money (QTM) states that the overall value level of commodity and services is…

Q: If a Central Bank decides it needs to decrease both the aggregate demand and the money supply, then…

A: Central bank can able to increase and decrease money supply with the help of various tools like…

Q: Why is the stability of the velocity of money important in explaining Fisher’s theory of the demand…

A: Fisher Theory of demand for money explains that there exist direct relationship between money supply…

Q: We've learned that the primary focus of the Federal Reserve is interest rates. Why would the Federal…

A: The federal reserve is responsible for controlling not only the interest rate but also the money…

Q: According to the quantity theory, if constant growth in the money supply is combined with…

A: An important theory of macroeconomics that relates the money supply in an economy and the price…

Q: Suppose it were proved that liquidity traps do not occur and that investment is not interest…

A: The liquidity trap is a situation in the economy when interest rate is low, and saving is high.…

Q: How would each of the following affect the demand for money? a tax on bonds held by individuals a…

A:

Q: Why is the money supply curve vertical?

A: The quantity theory of money refers to the theory of money which assumes that the quantity of money…

Q: How would each of the following affect the demand for money?a forecast by the Central bank that…

A: Equilibrium interest rate: The interest rate at which money supply is equal to the money demanded in…

Q: ase, can you answer the question below? I do not need an explanation. Thank you. Which of the…

A: A central bank is a bank which owned and run by the government of that country whereit is situataed…

Q: Can the money supply support a GDP level greater than itself? Explain your answer

A: Gross Domestic Product refers to the value of all final goods and services taken into account in an…

Q: When a central bank has driven down short-term nominal interest rates to nearly zero, the monetary…

A: A zero-bound rate of interest is a reference for short-term rates of interest to the lower limit of…

Q: What is the Taylor rule? Explain how a central bank may follow the Taylor rule to conduct monetary…

A: Taylor’s Rule: Taylor’s rule is a forecasting method that determines the interest rate which helps…

Q: If an economy is operating at full employment and there is a substantial increase in the money…

A: Full employment: - Full employment is that level of employment where the maximum possible labor…

Q: How is it that this expansionary monetary policy could actually lead to an increase in savings?…

A: The answer is as follows:,-

Q: What were John Maynard Keynes' criticisms of Irving Fishers theory? What are the factors that affect…

A: English economist John Maynard Keynes believed that old style economic theory didn't give an…

Q: Which interest rate is most likely to serve as the target interest rate by a Central Bank?   a)The…

A: The interest rate which is most likely to serve as the target interest rate by a central bank is the…

Q: Explain the Keynesian Concept about Money?

A: According to keynes,when quantity of money increases,due to which output and employment…

Q: Explain the factors on which an independent central bank can have positive impact and the factors on…

A: The central bank is the sole authority and major financial institution of the economy that indulges…

Q: How would a doubling of velocity affect Real and Nominal GDP, assuming the money supply doesn’t…

A: Classical quantity theory represents that if velocity and quantity of goods remain same then price…

Q: Why would it be problematic for a central bank to havea primary goal of maximizing economic growth?

A: A central bank conducts the monetary policies of a country.  It also regulates the commercial banks.

Q: Which of the following scenarios below BEST matches an inflationary monetary policy aka a “loose…

A: Monetary policy is the policy of the central bank in order to maintain inflation and money supply in…

Q: Which of the following would NOT result in a decreased money supply?

A: Supply of the money in an economy is an important factor causing fluctuation in the economy. An…

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

A: By increasing money supply the central bank can lower the interest rate which will make getting…

Q: Explain how speculative demand for money, precautionary demand and transitionary demand affect the…

A: Money is anything that is socially accept for the exchange of goods and services. It refers to…

Q: Economists believe that the determines the price level in the long run. Money supply Money demand…

A: Central bank influence money supply by buying or selling the government securities.

Q: There are several ways that governments can increase or decrease the money supply. Match the…

A: Money supply is the stock of money in circulation in an economy in a given time period.Open market…

Q: The Central bank ensures the adequacy of money supply in the financial system by printing and…

A: The Central bank ensures the adequacy of money supply in the financial system by printing and…

Q: Assume that the Central Bank’s (BoG) primary goal is to correct a weak economy. How can it use open…

A: Ghana is a developing country, rich in various natural resources and continuously improves its…

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: Show the effects of a change in the nominal interest rate and a change in real GDP using the demand…

A: In an economy, an economic model is used to explain the relationship between nominal interest rate…

Q: Describe in detail what an independent central bank means for an economy, and why is this…

A: A financial organisation that controls an economy's currency and money supply is known as the…

Q: If a central bank wants to end the defation and stimulate the economy,as in the case of Japan in the…

A: Deflation refers to decrease in price level or inflation rate below 0%. When an economy experiences…

Q: Which of the following is correct? The demand for money * a. increases as real GDP increases. b.…

A: Money demand for money represents quantity of money demanded in the economy. It is negatively sloped…

Q: How would each of the following affect the demand for money? Draw the curves for it a) a tax on…

A: a) Tax imposed on bonds will affect the quantity demanded of bonds by the individuals. A tax will…

Q: Assume that the central banks (bog) primary goal is to correct a weak economy. how can it use open…

A: Central bank of any country is responsible for its monetary policy, which includes three major…

Q: Show that the friedman's money equation is simply an extension of the general theory of demand for…

A: People keep the money to purchase goods and services, so the demand for money is a demand for actual…

Q: What is the Taylor rule? how a central bank may follow the Taylor rule to conduct monetary policy?

A: Taylor’s rule refers to a forecasting model essentially used to define the interest rates that will…

Q: what are the componets of money demand , according to marshal and fisher ?

A: Fisher gave the quantity theory of money in which he used money as a flow concept. Only Fisher has…

Q: When the Federal Reserve conducts an expansionarymonetary policy, what happens to the money…

A: A monetary policy is used by the central bank of a country to manage the money supply and the…

Q: List four mechanisms which the central bank might use to implement a contractionary monetary policy,…

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