When the Fed implements policy to prevent problems before they happen, it is called policy. O macropecuniary O macroconservative O macroengineered O macroprudential
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- “The Fed can perfectly control the amount of the monetary base, but has less control over the compositionof the monetary base.” Is this statement true, false, oruncertain? ExplainAccording to the textbook, explain why does The Fed have a better chance of fixing a recession caused by a drop in spending (AD) as compared to a recession caused by a loss of A, K eL (Solow)? No graphs are needed or wanted.The NBER says the economy went from a peak in December 2007 to a trough in June 2009, until hitting a peak in the fourth quarter of 2019, then a trough in April 2020, and improving since then. Given this description of the dates of the business cycle, does the Fed’s policy of changing the discount rate make sense? Why or why not? Only typed answer and don't use chat gpt to solve the problem
- The Fed’s target for the federal funds ratea. is an extra policy tool for the central bank, inaddition to and independent of the money supply.b. commits the Fed to set a particular money supplyso that it hits the announced target.c. is a goal that is rarely achieved because the Fedcan determine only the money supply.d. matters to banks that borrow and lend federalfunds but does not influence aggregate demand.Read “YOU’RE THE ECONOMIST: Did the Fed Cause the Great Recession?” in Chapter 26. In support of the Fed’s monetary policy prior to the deflation of the home prices bubble, one can argue that the reality is that increasing the money supply and low-interest rates were required to sustain expansion. Based on the Monetarist’s school of thought, criticize the Fed’s policyWith a policy of nominal GDP targeting, if the Fed expected 6% growth in real GDP and wanted an inflation rate of 2%, it would set a target for nominal GDP growth of 8% per year. True False
- Central bankers in Widgetsa have decided that inflation is too high and contractionary monetary policy is needed. First, position LRAS where it would be if contractionary policy is needed. Then, show the short‑run results of this policy action by shifting the appropriate curves on the graphs. graphs in images. Select all of the actions that are contractionary policy choices the central bankers could use. decrease reserve requirements sell bonds to banks increase taxes decrease government spending raise the interest rate for last‑resort loansMonetary policy affects the economy with a lagmainly because it takes a long timea. for central banks to make policy changes.b. to change the money supply after a policydecision has been made.c. for a change in the money supply to affectinterest rates.d. for a change in interest rates to affect investmentspending.d. How does this change in profitability affect the short-run aggregate-supply curve? e. If aggregate demand is held constant, how does this shift in the aggregate-supply curve affect the price level and the quantity of out-put produced? f. Do you think this Fed chairman was a good appointment?
- Assume that the fed adopts an inflation-targeting strategy. if oil prices rive abruptly by 20percent in response to an oil shortage, describe how the fed's monetary policy would be affected by this situation. do you think the inflation-targeting would be more or less effective in this case than if the fed balances its inflation concerns with unemployment concerns? explain?If a central bank buys government securities from the private sector-money markets,leading to an expansion of the money supply, other things being equal, what would theeffect be on the following?(d) Aggregate Supply(e) Aggregate Demand(f) Economic activity(g) Price level of the economy can you help giving me these 4 ans.The Fed's target for the federal funds rate A)is a goal that is rarely acheived because the fed can determine only the money supply B) is an extra policy tool for the central bank, in addition to and independent of the money supply C) commits the fed to set a particular money supply so that it hits the annouced target D) matter to banks that borrow and lend federal fund but does not influence aggregate demand.