In your own words, explain the difference between an expansionary/easy money policy and a contractionary/restrictive/tight money policy. What components are used in each policy, how and when are they used. Compare and contrast fiscal and monetary policy in terms of speed, flexibility and effectiveness in both recessions and inflation.

Q: Describe expansionary and restrictive monetary policies, and explain why and how they are used…

A: The expansionary and restrictive monetary policy are implemented by the fed. In the case of the…

Q: The central bank of your assigned Caribbean country decides to pursue an expansionary monetary…

A: To strengthen an economy, a central bank will use expansionary monetary policy.

Q: One of the three main tools of the Federal Reserve is fiscal policy.  True  False

A: Central Bank: The central bank is the apex bank of the country that supplies the money or maintains…

Q: Suppose a wave of investor and consumer pessimism in the USA causes a reduction in spending. If the…

A: If the US Fed chooses to engage in stabilization policy it should try to increase the money supply…

Q: Please elaborate on the sequence of actions that must take place for expansionary and contractionary…

A: Monetary policies are typically utilized to create short-term economic stability, they also have a…

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: 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: The supply-side effects show that a tax cut on labor income ________ the supply of labor and…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: What is one of the advantages of monetary policy over fiscal policy? 1) its control over the size of…

A: Monetary policy is implemented by the central bank of a country in which the bank increase or…

Q: 68)The Fed could end up being the proverbial “fool in the shower” according to monetarists because:…

A: "Fool in the shower" was coined by the economist Milton Friedman that policy intervention should be…

Q: Explain in detail how policy rate affects aggregate demand through a monetary transmission…

A: Policy rate: - it is a monetary policy tool of the central bank of a country to control money supply…

Q: using a graph of aggregate demand and supply explain how monetary policymakers would respond to…

A: The standard objectives of monetary policy makers are to accomplish or keep up full work, to…

Q: What is the difference between contractionary monetary policy and expansionary monetary policy and…

A: Monetary policy is the action taken by the central bank to control the overall supply of money and…

Q: Assume that the prevailing interest rate in this economy is 6%. If the central bank decides to…

A: Monetary policy is a set of tools used by a country's central bank to encourage long-term economic…

Q: Give two reasons why monetary policy might be better at closing an expansionary gap than fiscal…

A: Monetary policy:- These are the policy measures that are being taken introduced by the central bank…

Q: How do fiscal and monetary policies compare in terms of timing?

A: Fiscal policy is Revenue and Expenditure policy of the government. The management of the revenue…

Q: According to the Congressional Budget Office (CBO) federal debt that is high.and risiog.as a…

A: 3. According to Congressional Budget office, federal Debt that is high and rising as a percentage of…

Q: Which of the following is not an essential element of inflation​targeting?     A. increased…

A: Monetary policy is the policy regarding money supply in the economy. The monetary policy is operated…

Q: When economy has recovered from deep recession from zero-lower-bound, there is no risk of using…

A: Zero-bound is an expansionary monetary policy instrument where a national bank brings transient…

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 whether the current policy of the Federal Reserve “expansionary” (accommodative) or…

A: The current policy of the Federal Reserve is expansionary which is also referred to as accommodative…

Q: The difference between the market monetarist 5-percent target for nominal GDP growth and the older,…

A: Monetarism is an economic and financial theory that implies that by regulating the rate of increase…

Q: Which of the following statements is false?     It might sometimes make sense for a government to…

A: Monetary Policy helps to obtain price stability, full employment, and economic growth whereas Fiscal…

Q: newspaper that the Fed has just lowered the discount rate.  Does this signal that the Fed is moving…

A: Yes it  signals to the adoption of expansioady policy by the central bank.  Expansionary policy is…

Q: Explain each of these statements supported by reasonable reasoning: 1. Credibility is important…

A: When product is manufactured, cost  takes place along with revenue, which results into profit and…

Q: Identify and explain in detail the three monetary policy tools that the Board of Governors could use…

A: Central bank activities aimed at affecting the amount of money and credit in an economy are referred…

Q: What the need of the BSP to formulate a contractionary or expansionary monetary policy

A: The nations around the world have two major backbones in the form of the government, and the central…

Q: Monetary policy is subject to longer​ ________ lags than fiscal policy. A. Decision and​…

A: The time it takes for the government and central bank to react to an adverse macroeconomic event…

Q: “…monetary policy works on two principal economic variables: the aggregate supply of money in…

A: The monetarist theory is refer to the economic concept  which would contend in the money supply in…

Q: In what ways does the Fed utilize their monetary policy tools to affect or counter-balance fiscal…

A: Fiscal policy refers to the method of government spending and tax policies to take a control over…

Q: "If a central bank's desired intermediate target is a monetary aggregate (money supply), then its…

A: Monetary Policy  Monetary policy refers to the policy of the central bank by which the central bank…

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: A} How does the Expansionary and Contractionary Monetary POlicy affect the Inflation, GDP, Economic…

A: Since you asked multiple questions, we will solve the first question for you. If you want any…

Q: When government spending results in higher interest rates due to rising debt, what happens to…

A: The Gross Domestic Product (GDP) refers to the market value of all the final goods and services…

Q: Why has the FOMC maintained federal funds rate at their current level of 0 - 0.25% in its recent…

A: The Federal Open Market Committee (FOMC) sets the target interest rate at which commercial banks…

Q: Match each tool with the appropriate policy decrease the reserve ratio increase taxes sell bonds…

A: Expansionary fiscal policy is to decrease tax or increase spending or both 4th and 6th statement

Q: Monetary policy is often more effective than fiscal policy because It is blunter and more…

A: The nations tend to have various policy makers, and decision makers, who are involved in making of…

Q: given Y=C+I+G+X C=100+0.9Yd I=200-500r M=0.8Y-2000r X=100-0.2Y-500r G=200 T=0.2 L=800…

A: Given Information Consumption Function C=100+0.9YdInvestment Function I=200-500rReal Money supply…

Q: The Federal Open Market Committee can buy and sell government securities/bonds. Which of the…

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