What determines the magnitude of the changes in price level when central bank takes monetary policy...
What determines the magnitude of the changes in price level when central bank takes monetary policy measures that leads to a change in the aggregate demand?
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a. |
Changes in the money supply |
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|
b. |
Slope of the aggregate supply curve |
|
|
c. |
Rate of change of interest rate |
|
|
d. |
Total money supply in the economy |
Homework Answers
Changes in the money supply
With change in the money supply comes a change in inflation and interest rate which changes the aggregate demand.
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What determines the magnitude of the changes in price level when
central bank takes monetary policy...
1) of the Central Bank of Kuwait puts in place an expansionary monetary policy, its decision...
1) of the Central Bank of Kuwait puts in place an expansionary monetary policy, its decision is based on A) the fact that the economy is at ful employment B) Expectation of excessive inflation in the future C) the fact that the economy is in an expansion D) Unemployment level is high 2) When the interest rate is set at a very low rate A) the opportunity cost of holding money is very low B) the money demand will shift...
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Other things being equal, if the central bank undertakes expansionary monetary policy, we expect the aggregate...
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The interest-rate-based approach to the monetary policy transmission mechanism says that a change in the money...
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The below information shows that economy needs corrective actions by the Central Bank, which decided to use monetary policy. Year Actual Real GDP Potential GDP Price Level 2015 15.6 billion 15.8 billion 97 Answer the below questions: 1. If the Central Bank wants to keep real GDP at its potential level, should it use an expansionary or a contractionary monetary policy? 2. Explain the mechanism of that policy. Use the graph of Money demand and supply.
1) of the Central Bank of Kuwait puts in place an expansionary monetary policy, its decision is based on A) the fact that the economy is at ful employment B) Expectation of excessive inflation in the future C) the fact that the economy is in an expansion D) Unemployment level is high 2) When the interest rate is set at a very low rate A) the opportunity cost of holding money is very low B) the money demand will shift...
A central bank implements a contractionary monetary policy over worries that inflation will undermine further economic growth. Demonstrate the effect this policy has on the economy by shifting the aggregate demand (AD) curve in the appropriate direction Provide your answer below: Price Level Aggregate Supply Aggregate Demand Real GDP
Macroeconomic Multiple Choice Questions
Answer All 10 Questions*
1) If the Central Bank of Kuwait puts in place an expansionary monetary policy, its decision is based on A) the fact that the economy is at full employment B) Expectation of excessive inflation in the future C) the fact that the economy is in an expansion D) Unemployment level is high 2) When the interest rate is set at a very low rate A) the opportunity cost of holding money is...
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The below information shows that economy needs corrective actions by the Central Bank, which decided to use monetary policy. Year Actual Real GDP Potential GDP Price Level 2015 15.6 billion 15.8 billion 97 Answer the below questions: 1. If the Central Bank wants to keep real GDP at its potential level, should it use an expansionary or a contractionary monetary policy? 2. Explain the mechanism of that policy. Use the graph of Money demand and supply.
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