Some economists think that central banks should try toprick bubbles in the stock market before they get outof hand and cause later damage when they burst. Howcan monetary policy be used to prick a market bubble?Explain using the Gordon growth model.

Q: What are the purposes of inflation targeting, and howdoes this monetary policy strategy achieve…

A: Meaning of Inflation: Inflation is a sustained and appreciable rise in prices, once started…

Q: The Pakistan is experiencing both high inflation and high unemployment. Why the government will use…

A: The monetary policy is the policy of the government regarding the financial matters of the economy…

Q: What evidence is used to assess the stability of themoney demand function? What does the evidence…

A: The velocity is used as the measure to check whether the demand for money in the economy is stable…

Q: “The independence of the central bank has meantthat it takes the long view and not the short view.”…

A: Liberty of central (reserve) banks, explains the capability to set policy (monetary) instruments in…

Q: Your childhood friend believes Commercial banks no longer have any relevance in the current economic…

A: Commercial banks are the financial institutions that provide various banking services to people and…

Q: Consider two central banks: one with a history of maintaining price stability and low inflation, and…

A: Case 1: A history of maintaining price stability and low inflation It means that the central bank of…

Q: a) If  Bangladesh Bank wants to adopt expansionary monetary policy , what kinds of tools it can use…

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

Q: “Since financial crises can impart severe damage to theeconomy, a central bank’s primary goal should…

A: A major disruption in the financial-market can lead to a financial crisis. This mayarise because of…

Q: discuss the scope of monetary economics and its importance to the feild of economics

A: Monetary economics empowers us to comprehend how an economy works proficiently as well as how the…

Q: What is so important about an "inverted yield curve"??

A: Yield Curve:If you are going to attend the outdoor event, then there will be a chance to check the…

Q: 17. Which of the following sequence of events follows an expansionary monetary policy? arogoto

A: Expansionary monetary policy is a tool used by central Bank for the smooth going of the economy.

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 Central Bank can use monetary policy to prevent the stock market bubble? Explain how the policy…

A: Monetary policy: It refers to that policies which are used by the central banks or governments to…

Q: Lars Svensson, a former Princeton professor and deputy governor of the Swedish central bank,…

A: Deflation refers to a situation when the general price level falls and the economy experience…

Q: What is the basic objective of monetary policy? What are the major strengths of monetary policy? Why…

A: The monetary policy is used by the monetary authority or the central bank of the nation. There are…

Q: Inwhat ways might monetary policy be superior to fiscal policy? In what ways might it be inferior?

A: The economy is bagged by two policies that are the monetary and fiscal policies, which are the most…

Q: ere used a

A: Unconventional monetary policy like quantitative easing might then be employed for jump-starting the…

Q: These questions involve the Federal Reserve’s monetary policy tools. a. Imagine that the FOMC…

A: a.The FOMC is the Federal Open Market Committee which is the committee which determines whether to…

Q: When expansionary monetary policy is appropriate, how would the FED use the three tools?  BE…

A: A central bank, such as the Federal Reserve in the U.S., will use expansionary monetary to…

Q: Suppose that all the factors that cause economic growth remain constant and the economy is at full…

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

Q: Which monetary policy tool can the Federal Reserve use to conduct an expansionary monetary policy…

A: Monetary Policy Governing the quantity of money in an economy and the channels through which it is…

Q: Which monetary policy tool can the Federal Reserve use to conduct an expansionary monetary policy…

A: The Federal Reserve is a central bank that controls the money supply in an economy. It controls the…

Q: How do the monetary policy tools of the European System of Central Banks compare to the monetary…

A: The Federal reserve bank was established in 1913, under the Federal Reserve Act of 1913. The…

Q: Taking the baseline monetary OLG model literally, what features of the model economy enables fiat…

A: The introduction of valued fiat money to the basic overlapping generations model increases the…

Q: What kind of monetary policy rule did Milton Friedman advocate? Select one: a. Long-run economic…

A: According to Milton Friedman, the money supply rate should be equal to the real GDP growth rate.

Q: Should monetary authorities take steps to prevent asset bubbles? Discuss the instruments that the…

A:

Q: Describe an advantage and a disadvantage of the factthat monetary policy has so many different…

A: A monetary policy refers to a policy used by the central bank of a country. Under this policy, the…

Q: If the president of the central bank in this economy is convinced that there is no need for any…

A: If the president of the central bank in this economy is convinced that there is no need for monetary…

Q: The effectiveness of monetary policy depends on how easy it is for changes in the money supply to…

A: Answer- Need to find- The effectiveness of monetary policy depends on how easy it is for changes in…

Q: why might we perceive central banks in the gold standard era as pursuing passive monetary policy ?

A: Central Bank is the only authority to implement monetary policies in an economy to influence the…

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: Central banks can use monetary policy to O a) reduce interest rates. O b) increase government…

A: Monetary policy refers to the policy which is adopted by the central bank of the country to…

Q: Since the end of the Great Recession of 2008, interest rates have been at historic lows—in some…

A: The expansionary monetary policy through open market purchase which is related to the purchase of…

Q: When expansionary monetary policy is appropriate, how would the FED use the three tools?  BE…

A: A central bank, such as the Federal Reserve in the U.S., will use expansionary monetary to…

Q: What does liquidity mean? What are some less than 100% liquid monetary instruments?

A: In economics we can study regards many instruments like money , bonds etc. These are those…

Q: Why did inflation targets replace monetary targets as the most widely used strategy for monetary…

A: Inflation targeting is a monetary approach in which monetary policy is changed to attain a specified…

Q: ow does the Yield curve control affects the country? Can it lead to inflation

A: Yield curve control(YCC) is a type of policy that is considered as most influential by the central…

Q: Why were monetary policy responses ineffective during the Great Depression?

A: The great depression was characterized by the fall in the aggregate demand. The fall in aggregate…