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The borrowing from the central bank by the government leads to inflation as it increases the supply of money in the economy
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- The demand for money has fallen during the Covid-19 pandemic TRUE / FALSE During times of economic uncertainty people hoard cash. TRUE / FALSERecently the economic conditions of the country have been weakened. Even though inflation has not increased in the last year. Price of crude oil on the international market has increased by 15% last month. As a measure in controlling inflation in the country, the Monetary Policy Committee (MPC) of the Bank of Ghana has decided to restrict the supply of money and increase the target policy rate by 100 basis points (1%) Required:a. As a finance student, do you support the decision made by the monetary committee? Explain (not exceeding 6 lines of explanation).b. Explain how prices of debt securities would change in response to this policy? (not exceeding 6 lines of explanation) c. Assume the Monetary Policy Committee decides to reduce the target policy rate by 1.5% today and this decision is not backed by any financial market expectations. Will this change in policy directive affect yields paid by firms when they issue corporate bonds? Explain your answer.d. In the last month, the 91day…Which of the following are true: People demand cash only to finance transactions. TRUE / FALSE The demand for money has fallen during the Covid-19 pandemic TRUE / FALSE During times of economic uncertainty people hoard cash. TRUE / FALSE
- “Money supply of a nation is NOT fully determined by the central Bank.” Do you agree with the statement? Justify your answer in the context of correct modelSuppose the central bank decides it wishes to raise the interest rate (i). To do so, it will have to: Group of answer choices do an open market sale of bonds do an open market purchase of bonds increase the supply of money raise bond prices Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.Economic researchers have found Multiple Choice no relationship between rates of money growth and inflation rates. many examples of countries with low rates of money growth and high inflation rates. many examples of countries with high rates of money growth and low inflation rates. no examples of countries with high rates of money growth and low inflation rates. Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism.Answer completely and accurate answer.Rest assured, you will receive an upvote if the answer is accurate
- Please the correct answer please Don't answer by Pen paper please Monetary policy is the macroeconomic policy laid down by the central bank of an economy.” In terms of the above statement, explain how monetary policy can be used to combat inflation.MULTIPLE CHOICE! ONLY answer! NO explanation! 1. If the inflation rate tends to go up, then which of the following is the appropriate monetary policy that the Fed should conduct?Open market sale which will increase interest rates and decrease money supplyOpen market purchase which will increase interest rates and decrease money supplyOpen market purchase which will decrease interest rates and increase money supplyOpen market sale which sale which will decrease interest rates and increase money supply 2. If the Fed conducts Open Market Purchase, then:price of bonds increase, interest rates decrease and money supply decreases.price of bonds decrease, interest rates increase and money supply decreases.price of bonds increase, interest rates decrease and money supply increases.price of bonds decrease, interest rates decrease and money supply increases. 3. Which of the following is called the Federal Funds rate?The interest rate at which banks borrow money from the Fed.the interest rate at…138.) Austrian economists are worried about monetary policy that increases the money supply because An increase in the money supply causes consumers to borrow more - potentially too much more - in the short-run (overconsumption) An increase in the money supply reduces savings and increases future income available for new products An increase in the money supply causes investors to invest in projects that have higher expected rates of return (malinvestment) all of the above are correct
- Question 1-5. Answer True, False or Uncertain. Briefly explain your answer. 1. In an international economy of perfectly substitutable currencies, an increase in the stock of one countries money reduces real value of all monies. 2. The negative correlation between inflation and the real interest rate can be explained by the Fisher effect. 3. The rate of return equality holds in the model of illiquidity. 4. The rate of return equality is inconsistent with the observations found in the Equity Premium Puzzle. 5. Cooperative stabilisation can help countries have a fixed exchange rate regime and avoid high inflation.This is not a writing assignment, this is a multiple-choice question In their effort to get the U.S. economy out of the Great Recession of 2008-2009, Federal Reserve (or, Fed) used several rounds of "Quantitative Easing" (or QE) to increase money supply between 2008 and 2015. By "Quantitative Easing" we mean that the Fed did the following: (Please select the correct answer.) Group of answer choices The Fed lowered taxes to increase spending in the economy. The Fed lowered interest rates to increase the money supply in the economy. The Fed reduced the regulations upon the commercial and other banks under its supervision. The Fed increased money supply in the economy by purchasing financial assests (including bad loans) from banks.This is not a writing assignment, this is a multiple-choice question In their effort to get the U.S. economy out of the Great Recession of 2008-2009, Federal Reserve (or, Fed) used several rounds of "Quantitative Easing" (or QE) to increase money supply between 2008 and 2015. By "Quantitative Easing" we mean that the Fed did the following: (Please select the correct answer.) Group of answer choices The Fed lowered taxes to increase spending in the economy. The Fed lowered interest rates to increase the money supply in the economy. The Fed reduced the regulations upon the commercial and other banks under its supervision. The Fed increased the money supply in the economy by purchasing financial assets (including bad loans) from banks.
