Suppose that the economy of a country is experiencing inflation and the central bank wants to cool down the economy. Which of the following is likely to occur? A. Higher interest rates B. Selling of bonds to member banks C. Unemployment D. a and b E. a, b, and c

Suppose that the economy of a country is experiencing inflation and the central bank wants to cool down the economy. Which of the following is likely to occur? A. Higher interest rates B. Selling of bonds to member banks C. Unemployment D. a and b E. a, b, and c

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter17: Stabilizing The National Economy

Section17.1: Unemployment And Inflation

Problem 3R

See similar textbooks

Related questions

Q: If the quantity of money in the economy doubled tonight, the result for the economy would be

A: If the money supply in an economy doubled it is not good for the economy.

Q: Suppose you have 6000 dollars in savings when the price index is at 100 (a) If inflation pushes the…

A: a) As the price level goes up by 10%, the real value of the savings goes down that is the real value…

Q: Use the given scenarios and the information you have learned about Fiscal and Monetary policy to…

A: Answer: Monetary policy: Federal reserve can use the tools of monetary policy to correct it. The…

Q: Write in detail about business cycle with example of an economy(Country)

A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: Inflation has begun to appear in the US economy. Who benefits from inflation and who is most hurt?

A: Inflation refers to the sustained rise in the general price level in the economy. The rapid rise in…

Q: Use the AS AD diagram when answering this discussion question. A person states ... "To be honest,…

Q: . deflation despite increases in money supply. Take an example 2. Moderate inflation in a good…

A: 1. In the case of liquidity trap the LM curve is horizontal and in this scenario any change in money…

Q: If the government wanted to reduce inflation in the economy, it could: a. Increase income transfers…

A: Fiscal policy refers to changes in government spending, taxes and transfers. It is imposed by the…

Q: The Great Recession (2007 - 2009) was most likely driven by Select an answer and submit. For…

A: Great recession and the causes is complex and involve several forces. The deregulation of the…

Q: Which of the following events is likely to increase unemployment and drive the price level down?…

A: Unemployment refers to a situation in which the people of a nation who are ready and able to do a…

Q: A. The RBA (Reserve Bank of Australia) is concerned about the trend since the early 2000s of a 75%…

A: Introduction Question related to the topic study of economics among students.

Q: bad? Whom does it help and whom does it hurt? What would be a good rate of inflation for the USA and…

A: Inflation is the sustained increase in the general price level of goods and services in an economy…

Q: Question: The Federal Reserve is currently increasing interest rates, and has indicated that it will…

A: Given: Federal Reserve is increasing the interest rates and will continue doing that for all of…

Q: Which of the following events is most responsible for the Great Recession of 2007 to 2009? Select an…

A: "Recession is a prolonged period of economic downturn." When recession occurs economic variables…

Q: 1. Describe GDP & Unemployment Country Z 1 YEAR AGO 3.5% Country X Country Y 1 YEAR AGO 0.3% NOW NOW…

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

Q: d. A little bit of inflation is worse for society than a little bit of unemployment.

A: Economics is a branch of social science that describes and analyzes the behaviors and decisions…

Q: 1. A Rolling Stones song, one of the top-rated rock-and-roll songs of all time, was titled "You…

A: Since you have posted multiple questions, we are answering the first one for you. If you want a…

Q: Answer all of these three questions to get amazing feedback if you're not going to I'm was your time…

A: 1)True Because if production decreases and money supply is more,demand would exceed supply resulting…

Q: Directions: Use the given scenarios and the information you have learned about Fiscal and Monetary…

A: Given information Increase in price by 4% GDP increase by 5% Unemployment rate =1.3%

Q: Janelle has some money set aside for her retirement. She would like to buy a new car and is…

A: Here, it is given that Jenelle has some savings for her retirement, and at the same time, she wants…

Q: Scenario 2: The economy of Northhurst is currently experiencing GDP growth of over 7% with inflation…

A: According to the given scenario, in Northhurst economy, the current GDP growth rate is 7% and…

Q: What are the money markets and what are the capital markets? How do they differ? What are their…

A: Money market: 1)Money market is a short-term market where instruements like commercial papers,…

Q: c the impact of a war in the Middle East on the rate of inflation in the United States

A: Microeconomics is that part of economics that studies various agents individually, such as an…

Q: oney supply growth 10% p year real output growth 3% p year using theory quantity of money what…

A: In order to find the inflation rate, we have to find the percentage change in price. The change in…

Q: Darla takes out a home loan from a bank. The bank's goal is to make 4% real interest on the loan. If…

A: real interest rate = 4% Inflation = 3.5%

Q: Directions: Use the given scenarios and the information you have learned about Fiscal and Monetary…

A: “Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: QUESTION 2 (а) Explain why high inflation rate and recession do not normally happen at the same…

A: a. Inflation usually happens when there is excessive money supply in the economy. Recession happens…

Q: Over the last two years, the unemployment rate in Westerlight has risen from 4% to 8%, while GDP…

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

Q: 14) When the government prints money and gives it to the old as a subsidy-gift then, A) The gift has…

A: The total amount of money being circulated in an economy is referred to as money supply. It includes…

Q: (21) Carla just started her new job working at the Department of Commerce. In order to see whether…

A: Answer: (21). Correct option: option c (The inflation rate, the unemployment rate, and the growth…

Q: (a) Identify two macro-economic aims of the government. (b) Explain two reasons why someone may be…

A: Two macroeconomic aims of government are: (1) To adopt and implement policies that encourage and…

Q: s inflation good or bad

A: Inflation is the aggregate rise in the level of prices in the economy. Inflation is a macro economic…

Q: assuming, in a country. the unemployment rate was 15%, And the inflation rate was 17% Ánd the GDP…

A: 1)With single policy,this goal would be achieved. Because only growth rate needs to be increased to…

Q: Suppose you put $100 in the bank on January 1, 2017. If the annual nominal interest rate is 5…

A: Following information is given:On January 1, 2017, amount deposited = $100Nominal interest rate =…

Q: The Fed raises the interest rate when it O a. fears inflation. O b. wants to increase the quantity…

A: We have show that If the federal Reserve ràises interest rates it does not want to increase the…

Q: What should people do when inflation is high

A: Inflation is a general rise in the price level in a economy over a period of time which results in…

Q: By how much did the change in the price of college tuition differ from the 2019 average rate of…

A: Given: The average rate of inflation:+2.3% College tution:+1.9%

Q: If an economy is below its full employment, a. the government should print money and distribute the…

A: Answer is given below

Q: Which topic is more important fighting inflation or fighting a recession?

A: Inflation is the measure of increase in price level of a basket of consumption goods and services…

Q: Q: Discuss how to control or reduce the Inflation and Unemployment.

A: Government along with central bank control the financial as well as economic functioning of a…

Q: What are the implications of this?

A: Inflation is common phenomenon in modern capitalist countries of the world. It is generally…

Q: Inflation in Africa is expected to pick back up in the near future. How will this inflation affect…

A: Inflation means rise in prices of goods and services.A mild level of inflation is required for a…

Concept explainers

Unemployment and Cost of Unemployment

Unemployment is the state of being unemployed, even when an individual is actively seeking work opportunities. The unemployment rate refers to the percentage of the workforce that is currently unemployed.

Question

Suppose that the economy of a country is experiencing inflation and the central bank wants to cool down the economy. Which of the following is likely to occur?

A. Higher interest rates

B. Selling of bonds to member banks

C. Unemployment

D. a and b

E. a, b, and c

Definition Definition State in which an individual is without work, despite actively seeking employment opportunities. The unemployment rate refers to the percentage of the workforce that is currently unemployed. Unemployment is one of the key indicators of the conditions prevailing in an economy. It is therefore considered a barometer that points out the condition of an economy.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Inflation has begun to appear in the US economy. Who benefits from inflation and who is most hurt?
Which would likely increase the average level of interest rates for auto loans? Select one: a. An increase in inflation. b. An increase in the unemployment rate. c. A decrease in the level of business investment. d. A decrease in the amount of consumer spending.
Answer all of these three questions to get amazing feedback if you're not going to I'm was your time you will get horrible feedback!!! 1. Hyperinflation can be caused by a lack of growth in goods or services? True or false 2. A loss of consumer confidence can result from hyperinflation? True or false 3. The unemployment rate is a measure of the economic health of a nation? True or false
SHORT ANSWER Workers on the manufacturing floor are being replaced by robots. For the U.S. economy this is good and bad. The good - Automation allows companies compete with cheap labor from other countries. The bad - Automation eliminates jobs. In your opinion: Where is this trend heading and how will it impact the U.S. economy long term? What policies or legislation would you propose to make the situation better going forward?
Need only answer The large spike in the inflation rate in New Zealand and other developed countries in the mid 1970s was mainly caused by Select one: a. the onset of the Great Depression. b. the Korean War. c. the formation of OPEC and the creation of the oil crisis. d. government borrowing to fund "Think Big" projects. One of the reasons why incomes in the Roman Empire around the year 1 A.D. were higher than European incomes in the year 1000 A.D was that Select one: a. many useful Roman inventions had been forgotten by the year 1000 A.D. b. the climate had cooled by the year 1000 A.D. making growing food more difficult. c. Roman law enabled trade and commerce. d. the slave economy of Rome was a more efficient economic model than the feudal economy of the Middle Ages. Adam Smith argued which of the following? Select one: a. It is not the accumulation of gold and silver that increases well-being but what can be done with gold and silver. b. From each according to his abilities, to…
In the U.S., when the unemployment rate is around 9%, this indicates a) None of the choices are correct b) the U.S. economy is in a major recession c) that we have higher unemployment than in the Great Depression of the 1930s. d) the U.S. economy is booming and everyone who wants a job can easily find one. e) the U.S. economy is at full employment
Good outcomes for an economy include Select one: a. low GDP, low inflation, and low unemployment. b. high GDP, high inflation, and low unemployment. c. high GDP, low inflation, and low unemployment. d. low GDP, high inflation and low unemployment. e. high GDP, high inflation, and high unemployment.
c.Explain in detail, 4 possible causes of change in the direction of the business cycle. You are looking for things that are out of the control of the government. Do not talk about fiscal or monetary policy tools here. Don’t say inflation or recession!
What does the invisible hand concept, introduced by Adam Smith, refer to in economics? A. The role of government in regulating markets B. The self-regulating nature of markets where individuals pursuing their own self-interest unintentionally benefit society C. The importance of charity and philanthropy in economic development D. The role of central banks in controlling interest rates
Q2) B. Explain some policies to reduce the high rate of inflation.
The global economy has seen signiﬁcant changes since the banking crisis in 2008. Many economies have gone through large-scale austerity programs to reduce deﬁcits. How has this affected the business organizational structure? How has employment and personal income been affected?
Q: Discuss how to control or reduce the Inflation and Unemployment.