When an unanticipated expansionary policy is implemented, explain the probable results of such an action on the inflation rate. Introduction: The monetary policy indicates the manipulation in the money supply. This action results in an increase in the interest rates. Such an expansion in the monetary policy will increase the money supply in the economy, diminishes the short term interest rates, promotes investments and also encourages the demand for consumption.

Question

Which of the following aspects will be included in Macroeconomic policies? a. Government spending and borrowing O b. All of these O c. Taxes o d. Exchange rate determinants Clear my choice

Answer 1

Question

Chapter 17, Problem 2CP

A.

Summary Introduction

To Determine: When an unanticipated expansionary policy is implemented, explain the probable results of such an action on the inflation rate.

Introduction: The monetary policy indicates the manipulation in the money supply. This action results in an increase in the interest rates. Such an expansion in the monetary policy will increase the money supply in the economy, diminishes the short term interest rates, promotes investments and also encourages the demand for consumption.

B.

Summary Introduction

To Determine: While an unanticipated expansionary policy is implemented, explain the probable results of such an action on the real output and employment.

Introduction: The monetary policy indicates the manipulation in the money supply. This action results in an increase in the interest rates. Such an expansion in the monetary policy will increase the money supply in the economy, diminishes the short term interest rates, promotes investments and also encourages the demand for consumption.

C.

Summary Introduction

To Determine: While an unanticipated expansionary policy is implemented, explain the probable results of such an action on the real interest rate.

Introduction: The monetary policy indicates the manipulation in the money supply. This action results in an increase in the interest rates. Such an expansion in the monetary policy will increase the money supply in the economy, diminishes the short term interest rates, promotes investments and also encourages the demand for consumption.

D.

Summary Introduction

To Determine: While an unanticipated expansionary policy is implemented, explain the probable results of such an action on the nominal interest rate.

Introduction: The monetary policy indicates the manipulation in the money supply. This action results in an increase in the interest rates. Such an expansion in the monetary policy will increase the money supply in the economy, diminishes the short term interest rates, promotes investments and also encourages the demand for consumption.

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Which of the following aspects will be included in Macroeconomic policies? a. Government spending and borrowing O b. All of these O c. Taxes o d. Exchange rate determinants Clear my choice

Conducting monetary policy so that the FF rate = 1.25%, where the FF rate is the nominal federal funds interest rate, is an example of : A. an active policy rule. B. a passive policy rule. C. discretionary policy. D. an automatic stabilizer.

Using the money market diagram, explain the effect Of this policy measure on the real interest rate.

Answer 2

Question

Chapter 17, Problem 2CP

A.

Summary Introduction

To Determine: When an unanticipated expansionary policy is implemented, explain the probable results of such an action on the inflation rate.

Introduction: The monetary policy indicates the manipulation in the money supply. This action results in an increase in the interest rates. Such an expansion in the monetary policy will increase the money supply in the economy, diminishes the short term interest rates, promotes investments and also encourages the demand for consumption.

B.

Summary Introduction

To Determine: While an unanticipated expansionary policy is implemented, explain the probable results of such an action on the real output and employment.

Introduction: The monetary policy indicates the manipulation in the money supply. This action results in an increase in the interest rates. Such an expansion in the monetary policy will increase the money supply in the economy, diminishes the short term interest rates, promotes investments and also encourages the demand for consumption.

C.

Summary Introduction

To Determine: While an unanticipated expansionary policy is implemented, explain the probable results of such an action on the real interest rate.

Introduction: The monetary policy indicates the manipulation in the money supply. This action results in an increase in the interest rates. Such an expansion in the monetary policy will increase the money supply in the economy, diminishes the short term interest rates, promotes investments and also encourages the demand for consumption.

D.

Summary Introduction

To Determine: While an unanticipated expansionary policy is implemented, explain the probable results of such an action on the nominal interest rate.

Introduction: The monetary policy indicates the manipulation in the money supply. This action results in an increase in the interest rates. Such an expansion in the monetary policy will increase the money supply in the economy, diminishes the short term interest rates, promotes investments and also encourages the demand for consumption.

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Answer 3

Question

Chapter 17, Problem 2CP

A.

Summary Introduction

To Determine: When an unanticipated expansionary policy is implemented, explain the probable results of such an action on the inflation rate.

Introduction: The monetary policy indicates the manipulation in the money supply. This action results in an increase in the interest rates. Such an expansion in the monetary policy will increase the money supply in the economy, diminishes the short term interest rates, promotes investments and also encourages the demand for consumption.

B.

Summary Introduction

To Determine: While an unanticipated expansionary policy is implemented, explain the probable results of such an action on the real output and employment.

Introduction: The monetary policy indicates the manipulation in the money supply. This action results in an increase in the interest rates. Such an expansion in the monetary policy will increase the money supply in the economy, diminishes the short term interest rates, promotes investments and also encourages the demand for consumption.

C.

Summary Introduction

To Determine: While an unanticipated expansionary policy is implemented, explain the probable results of such an action on the real interest rate.

Introduction: The monetary policy indicates the manipulation in the money supply. This action results in an increase in the interest rates. Such an expansion in the monetary policy will increase the money supply in the economy, diminishes the short term interest rates, promotes investments and also encourages the demand for consumption.

D.

Summary Introduction

To Determine: While an unanticipated expansionary policy is implemented, explain the probable results of such an action on the nominal interest rate.

Introduction: The monetary policy indicates the manipulation in the money supply. This action results in an increase in the interest rates. Such an expansion in the monetary policy will increase the money supply in the economy, diminishes the short term interest rates, promotes investments and also encourages the demand for consumption.

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Answer 4

Question

Chapter 17, Problem 2CP

A.

Summary Introduction

To Determine: When an unanticipated expansionary policy is implemented, explain the probable results of such an action on the inflation rate.

Introduction: The monetary policy indicates the manipulation in the money supply. This action results in an increase in the interest rates. Such an expansion in the monetary policy will increase the money supply in the economy, diminishes the short term interest rates, promotes investments and also encourages the demand for consumption.

B.

Summary Introduction

To Determine: While an unanticipated expansionary policy is implemented, explain the probable results of such an action on the real output and employment.

Introduction: The monetary policy indicates the manipulation in the money supply. This action results in an increase in the interest rates. Such an expansion in the monetary policy will increase the money supply in the economy, diminishes the short term interest rates, promotes investments and also encourages the demand for consumption.

C.

Summary Introduction

To Determine: While an unanticipated expansionary policy is implemented, explain the probable results of such an action on the real interest rate.

Introduction: The monetary policy indicates the manipulation in the money supply. This action results in an increase in the interest rates. Such an expansion in the monetary policy will increase the money supply in the economy, diminishes the short term interest rates, promotes investments and also encourages the demand for consumption.

D.

Summary Introduction

To Determine: While an unanticipated expansionary policy is implemented, explain the probable results of such an action on the nominal interest rate.

Introduction: The monetary policy indicates the manipulation in the money supply. This action results in an increase in the interest rates. Such an expansion in the monetary policy will increase the money supply in the economy, diminishes the short term interest rates, promotes investments and also encourages the demand for consumption.

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Answer 5

Chapter 17, Problem 2CP

A.

Summary Introduction

To Determine: When an unanticipated expansionary policy is implemented, explain the probable results of such an action on the inflation rate.

Introduction: The monetary policy indicates the manipulation in the money supply. This action results in an increase in the interest rates. Such an expansion in the monetary policy will increase the money supply in the economy, diminishes the short term interest rates, promotes investments and also encourages the demand for consumption.

B.

Summary Introduction

To Determine: While an unanticipated expansionary policy is implemented, explain the probable results of such an action on the real output and employment.

Introduction: The monetary policy indicates the manipulation in the money supply. This action results in an increase in the interest rates. Such an expansion in the monetary policy will increase the money supply in the economy, diminishes the short term interest rates, promotes investments and also encourages the demand for consumption.

C.

Summary Introduction

To Determine: While an unanticipated expansionary policy is implemented, explain the probable results of such an action on the real interest rate.

Introduction: The monetary policy indicates the manipulation in the money supply. This action results in an increase in the interest rates. Such an expansion in the monetary policy will increase the money supply in the economy, diminishes the short term interest rates, promotes investments and also encourages the demand for consumption.

D.

Summary Introduction

To Determine: While an unanticipated expansionary policy is implemented, explain the probable results of such an action on the nominal interest rate.

Introduction: The monetary policy indicates the manipulation in the money supply. This action results in an increase in the interest rates. Such an expansion in the monetary policy will increase the money supply in the economy, diminishes the short term interest rates, promotes investments and also encourages the demand for consumption.

Answer 6

Chapter 17, Problem 2CP

A.

Summary Introduction

To Determine: When an unanticipated expansionary policy is implemented, explain the probable results of such an action on the inflation rate.

Introduction: The monetary policy indicates the manipulation in the money supply. This action results in an increase in the interest rates. Such an expansion in the monetary policy will increase the money supply in the economy, diminishes the short term interest rates, promotes investments and also encourages the demand for consumption.

Answer 7

Chapter 17, Problem 2CP

A.

Summary Introduction

To Determine: When an unanticipated expansionary policy is implemented, explain the probable results of such an action on the inflation rate.

Introduction: The monetary policy indicates the manipulation in the money supply. This action results in an increase in the interest rates. Such an expansion in the monetary policy will increase the money supply in the economy, diminishes the short term interest rates, promotes investments and also encourages the demand for consumption.

Answer 8

B.

Summary Introduction

To Determine: While an unanticipated expansionary policy is implemented, explain the probable results of such an action on the real output and employment.

Introduction: The monetary policy indicates the manipulation in the money supply. This action results in an increase in the interest rates. Such an expansion in the monetary policy will increase the money supply in the economy, diminishes the short term interest rates, promotes investments and also encourages the demand for consumption.

Answer 9

B.

Summary Introduction

To Determine: While an unanticipated expansionary policy is implemented, explain the probable results of such an action on the real output and employment.

Introduction: The monetary policy indicates the manipulation in the money supply. This action results in an increase in the interest rates. Such an expansion in the monetary policy will increase the money supply in the economy, diminishes the short term interest rates, promotes investments and also encourages the demand for consumption.

Answer 10

C.

Summary Introduction

To Determine: While an unanticipated expansionary policy is implemented, explain the probable results of such an action on the real interest rate.

Introduction: The monetary policy indicates the manipulation in the money supply. This action results in an increase in the interest rates. Such an expansion in the monetary policy will increase the money supply in the economy, diminishes the short term interest rates, promotes investments and also encourages the demand for consumption.

Answer 11

C.

Summary Introduction

To Determine: While an unanticipated expansionary policy is implemented, explain the probable results of such an action on the real interest rate.

Introduction: The monetary policy indicates the manipulation in the money supply. This action results in an increase in the interest rates. Such an expansion in the monetary policy will increase the money supply in the economy, diminishes the short term interest rates, promotes investments and also encourages the demand for consumption.

Answer 12

D.

Summary Introduction

To Determine: While an unanticipated expansionary policy is implemented, explain the probable results of such an action on the nominal interest rate.

Introduction: The monetary policy indicates the manipulation in the money supply. This action results in an increase in the interest rates. Such an expansion in the monetary policy will increase the money supply in the economy, diminishes the short term interest rates, promotes investments and also encourages the demand for consumption.

Answer 13

D.

Summary Introduction

To Determine: While an unanticipated expansionary policy is implemented, explain the probable results of such an action on the nominal interest rate.

Introduction: The monetary policy indicates the manipulation in the money supply. This action results in an increase in the interest rates. Such an expansion in the monetary policy will increase the money supply in the economy, diminishes the short term interest rates, promotes investments and also encourages the demand for consumption.

Answer 14

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Ch. 17 - Prob. 1PS Ch. 17 - Prob. 2PS Ch. 17 - Prob. 3PS Ch. 17 - Prob. 4PS Ch. 17 - Prob. 5PS Ch. 17 - Prob. 6PS Ch. 17 - Prob. 7PS Ch. 17 - Prob. 8PS Ch. 17 - Prob. 9PS Ch. 17 - Prob. 10PS

Solution Summary: The author explains that an unanticipated expansionary policy increases the money supply in the economy, diminishes short-term interest rates, promotes investments, and encourages consumption.

Chapter 17 Solutions