If the unemployment rate falls below its long-run level, which policies would be appropriate to stabilize output? a. increase the money supply, increase taxes b. increase the money supply, cut taxes c. decrease the money supply, increase taxes d. decrease the money supply, cut taxes

Q: If the Fed sells $100 million of U.S. government securities, what happens to the quantity of money?

A: Open Market Operation:-  To keep the amount of money in circulation under control, the Federal Bank…

Q: a) According to Monetarism, when does an increase in money supply change both Real GDP and price…

A: a) A contractionary monetary policy reduces an economy's money supply. A reduction in the money…

Q: In 2004 the Fed began raising interest rates? What is likely to happen to the price level and real…

A: The macroeconomic equilibrium in an economy is determined by the aggregate demand and aggregate…

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: If the Federal Reserve wanted use an open market operation to combat a recession, what would they…

A: The recession is the period of economic slowdown in the economy where the economy will experience a…

Q: Which of the following is true of monetary policy?   a. If the Fed wants to increase the money…

A: Monetary policy is controlled and imposed by central bank.

Q: Suppose the U.S. economy is initially at long run equilibrium, when there is an unexpected large…

A: Due to the open market purchase of securities, there will be an increase in the supply of money due…

Q: 44. According to the Monetarists, excessive government spending, whether financed by borrowing or…

A: Monetarist: It refers to the theory under which money supply will be increased that help in…

Q: In monetarism, how will each of the following affect the price level in the short run? a) An…

A: (a)   When velocity increases, it leads to an increase in the money supply in the economy. Also, it…

Q: On which of the following do monetarists and Keynesians disagree? A. Deflation causes unemployment…

A: Aggregate supply curve in Monetarists model is vertical straight line at the full employment…

Q: the Federal Reserve attempts to grow the money supply in a recession. How does such a stimulus…

A: It's commen policy that central bank increase money supply in an economy during recession period.

Q: The FED is facing a problem of unemployment. What policy should be used? How would each of the tools…

A: FED is used to refer to the federal government of the United States.

Q: An increase in the money supply will shift aggregate demand to the left. TRUE OR FALSE?

A: An increase in money supply decreases interest rate, which increases investment. Higher investment…

Q: The president needs to make any changes to the economy through the Fed?? True or False

A: In any economy, two types of polices are implemented to influence the economy. The two polices are…

Q: An economy is in long-run macroeconomic equilibrium with an unemployment rate of 3.5% and an…

A: With long run equilibrium or Natural rate of unemployment at potential output is 3.5 %, the short…

Q: Expansionary Monetary Policy is used to during a The Federal Reserve will v bonds which v the money…

A: Expansionary monetary policy refers to increase in money supply. It is implemented by central bank.

Q: ompare the Keynesian and Monetarists theories. Describe why they disagree with each other over how…

A: Comparison between the Keynesian and Monetarists theories.   Factors Monetarist theories…

Q: The Monetarists believe that a monetary restraint can actually lower interest rates. How do they…

A: Monetary policy are implemented by the government or central bank to manage the money supply in the…

Q: According to Monetarism, when does an increase in money supply change both Real GDP and price level?…

A: This will be explained through a graph below:

Q: ume th money velóčitý iš čóńštánt. a. Suppose the money supply increases by 12%. What do you expect…

A: a). In short-runAssumption: 1) Price level is fixed: 2) aggregate supply curve is flat.In the short…

Q: The economy's unemployment rate is 2% and the inflation rate is 18%. The most appropriate policy for…

A: As we know that Phillips curve shows the relationship between inflation and Unemployment rate . And…

Q: If the nation is currently in a recession, name one thing the Federal Reserve can do to affect the…

A: The monetary policies are those policies which are enacted by the central bank of a country to…

Q: a) Discuss monetary policy and fiscal policy by comparing and contrasting their effects in the short…

A: (a) Monetary Policy An expansionary monetary policy causes the output to rise, the price level to…

Q: Policy? Statement 1: An inside lag exists between the time a policy change is needed and the time…

A: Fiscal policy refers to the actions taken by the government to interfere in the economy. Monetary…

Q: According to Monetarism, when does an increase in money supply change only price level and not Real…

A: Monetarism is an economic and financial principle that claims that by regulating the level of rise…

Q: For each of the following, please explain each step and show it in the graph! c) Assume an economy…

A: LRAS = Long-run aggregate supplySRAS = Short-run aggregate supplyAD = Aggregate demand

Q: Which of these is an alternative to monetar policy and aims to reduce inflation? a) reduce the…

A: Monetary policy refers to a set of tools used by a country's central bank to achieve its goals of…

Q: image attached

A: An economy expands as the aggregate demand(AD) rises. This creates excess demand at the existing…

Q: Congress raises taxes and the Fed reduces money supply, then in the short run, the two  policies…

A: *ANSWER:-  * The OPTION A (lower-income but we don't know if the interest rate will rise or not) is…

Q: Describe how the Federal Reserve can use its authority to stimulate the economy. How does the Fed…

A: 1. The Federal Reserve's two legal duties in the United States are to establish a consistent and…

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…

Q: ntral bank sells government securities from the private sector-money markets other things being…

A: Hi! Thank you for the question, As per the honor code, we are allowed to answer three sub-parts at a…

Q: Do Monetarists and Keynesians believe that inflation is always and everywhere a monetary phenomenon?…

A: Monetarists view: Monetarists argue that if the Money Supply rises faster than the rate of growth of…

Q: “The Fed can perfectly control the amount of the monetary base, but has less control over the…

A: Monetary base is a measure of money supply that includes only notes in circulation,the most liquid…

Q: What do monetarists predict will happen in the short run and in the long run as a result of each of…

A: The term velocity of money means the amount of circulation of a unit of money within an economy. It…

Q: In the short run, expansionary monetary or fiscal policy is expected to O increase; decrease.…

A: Expansionary monetary policy is implemented by the central bank to increase the money supply via…

Q: What do monetarists predict will happen in the short run and the long run as a result of each of the…

A: long-run equilibrium:-In a completely competitive market, when marginal revenue equals marginal…

Q: hat do monetarists predict will happen in the short run and in the long run as a result of each of…

A: Quantity theory of money: The quantity theory of money expresses that cash supply and price level in…

Q: Why do prices rise when the government prints too much money

A: The quantity theory of money states that the economy is in equilibrium when the money market and…

Q: Economics Which school(s) argue that changes in the money supply will have no effect on output? A.…

A: The school of thought that argues that the changes in the money supply will have no effect on the…