Question

1) Under inflation targeting, a central bank must pursue policies that Select one: A. keep the inflation rate within a specific target range. B. keep the inflation rate at a target value of zero. C. keep the inflation rate above some specific target value. D. lower the inflation rate, provided this can be done without raising the unemployment rate above a specified target value.

2)

If the desired intermediate target is an interest rate, then the preferred operating target will be a(n) _________ variable like the _________.

Select one:

A. reserve aggregate; monetary base

B. interest rate; three-month Treasury-bill rate

C. interest rate; federal funds rate

D. reserve aggregate; nonborrowed base

0 0
Add a comment Improve this question Transcribed image text
Know the answer?
Add Answer to:
1) Under inflation targeting, a central bank must pursue policies that Select one: A. keep the...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • A central back engages in tight monetary policy in order to prevent inflation from undermining economic...

    A central back engages in tight monetary policy in order to prevent inflation from undermining economic growth. Shift the aggregate demand (AD) curve on the graph below to show the impact of this policy on the economy. Provide your answer below: Price Level Aggregate Supply Aggregate Demand Real GDP QUESTION 25 - 1 POINT A healthy economic climate usually involves some sort of market orientation at the making level. individual, or firm decision- Select the correct answer below: O macroeconomic...

  • In 2018, the Federal Reserve, the Central Bank for the U.S., raised the Federal Funds Rate...

    In 2018, the Federal Reserve, the Central Bank for the U.S., raised the Federal Funds Rate three times from 1.0% in 2017 to 2.20% in November of 2018. The Fed is likely to continue increasing interest rates in 2019 and 2020. (1) What effect is a higher Federal Funds Rate likely to have on the number of loans banks make, on consumption and on investment? Explain why. (2) Why is the Fed raising interest rates now? Explain how the current...

  • If a monetary authority uses inflation targeting of 1% to 2% per year, deflation calls for:...

    If a monetary authority uses inflation targeting of 1% to 2% per year, deflation calls for: a balanced budget. contractionary monetary policy. no change to monetary policy. quantitative easing. An increase in the interest rate causes the aggregate _____ curve to shift _____. supply; leftward demand; leftward demand; rightward supply; rightward When the interest rate falls, the value of the U.S. dollar in foreign exchange markets tends to _____ and net exports tend to _____. fall; decrease rise; decrease fall;...

  • hich one of these policies should the Fed engage in if unemployment is 12% and inflation...

    hich one of these policies should the Fed engage in if unemployment is 12% and inflation is 1.0%? Select one: a. Issue new government bonds and increase government borrowing b. Lower income and corporate taxes c. Increase government spending on infrastructure d. Buy bonds through an Open Market Operation e. Target a higher Federal Funds Rate

  • Which one of these policies should the Fed engage in if unemployment is 9% and inflation...

    Which one of these policies should the Fed engage in if unemployment is 9% and inflation is 1.5%? Select one: a. Issue new government bonds and increase government borrowing b. Sell government bonds through an Open Market Operation c. Increase discretionary government spending d. Raise the Required Reserves Ratio e. Target a lower Federal Funds Rate

  • A 1 ) Whethewin FALSE A) run Anhalt The banks vides the bank within D) Bantal...

    A 1 ) Whethewin FALSE A) run Anhalt The banks vides the bank within D) Bantal s tenkast ( int) Hverything else held constant, when the federal funderat the interest rate paid on reserves, the quantity of reserves demanded rises when the federal funds rate A) abvers B) above, falls C) below, rises D) below, falls 3. (4 points) Inflation results in A) ease of planning for the future. B) ease of comparing prices over time. C) lower nominal interest...

  • answer please 25. A bank borrows money from another bank on an overnight basis to meet...

    answer please 25. A bank borrows money from another bank on an overnight basis to meet reserve requirements in the: a. stock market. b. bond market. c. Federal funds market. d. U.S.Treasury bill market. 26. Fiscal policy in the United States is the responsibility of the: a. US Treasury b. Federal Reserve c. Internal Revenue Service d. US Congress and Administration 27. Monetary policy in the United States is the responsibility of the: b. Federal Reserve a. US Treasury c....

  • 6) Financial crises in advanced economies might start from a A) debt deflation. B) currency crisis....

    6) Financial crises in advanced economies might start from a A) debt deflation. B) currency crisis. C) mismanagement of financial innovations. D) currency mismatch. 7) The most common definition that monetary policymakers use for price stability is A) low and stable deflation. B) an inflation rate of zero percent. C) high and stable inflation. D) low and stable inflation. 8) Monetary policy is considered time-inconsistent because A) of the lag times associated with the implementation of monetary policy and its...

  • The U.S. central bank that sets monetary policy and regulates the U.S. banking system is known...

    The U.S. central bank that sets monetary policy and regulates the U.S. banking system is known as the: Select the correct answer Regional Central Bank The Federal Reserve Bank of New York The Congress Question 2 5 Points Which of the following is not a component of the Fed System? Select the correct answer Member Banks Federal Reserve District Banks Federal Open Market Committee Regional Committee Question 3 5 Points The function of setting reserve requirements and supervising member banks...

  • 2.When a negative aggregate demand shock occurs and creates a short-run recessionary equilibrium, a. eventually...

    2.When a negative aggregate demand shock occurs and creates a short-run recessionary equilibrium, a. eventually wages and prices will fall and move the economy back to potential output b. the government could increase spending and/or lower taxes to move the economy back toward potential output c. the Federal Reserve could lower interest rates to move the economy back toward potential output d. all of the above 3. If the unemployment rate were 6% and the Federal Reserve believed that structural...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT