Congratulations! You have been appointed an economic policy adviser to the U.S. You are told that the economy is significantly underutilizing its available resources and that the following will happen the next year: World recession will continue and the prices of oil will increase significantly. After these two events, the adequate monetary policy would be:
Multiple Choice
Contractionary MP: Fed buys government securities to the banking
sector→ ↑MS → ↑Banks reserves → ↑available loans → ↓i → ↑C,I →
shift the AD to the right → ↑ GDP.
Contractionary FP: Fed sells bonds government securities to the banking sector → ↓ MS → ↓banks reserves → ↓available loans → ↑i → ↓C,I → shift the AD to the left → ↓GDP
Expansionary MP: Fed buys government securities to the banking sector → ↑MS → ↑Banks reserves → ↑available loans → ↓i → ↑C,I → shift the AD to the right → ↑ GDP.
Expansionary MP: Fed buys government securities to the banking
sector→ ↑MS → ↑Banks reserves → ↑available loans → ↑i → ↑C,I →
shift the AD to the left → ↑ GDP.
Expansionary MP: Fed buys government securities to the banking
sector→ ↑MS → ↑Banks reserves → ↑available loans → ↑i → ↑C,I →
shift the AD to the left → ↑ GDP.
Since there will be recession and the GDP would be low, Fed will
increase the money supply to increase consumption.
Congratulations! You have been appointed an economic policy adviser to the U.S. You are told that...
Congratulations! You have been appointed an economic policy adviser to the U.S. You are told that the economy is significantly underutilizing its available resources and that the following will happen the next year: World recession will continue and the prices of oil will increase significantly. An adequate policy to move the economy back to GDP of full employment is: Multiple Choice Expansionary FP: Higher G, shifting the AD to the right, and eventually increasing GDP. Contractionary FP: Higher G, shifting...
Congratulations! You have been appointed an economic policy adviser to the U.S. You are told that the economy is significantly underutilizing its available resources and that the following will happen the next year: World recession will continue and the prices of oil will increase significantly. These two events will take the US economy from: Multiple Choice From a recessionary gap to lower GDP, increasing the economic recession. From a recessionary gap to higher GDP, reducing the economic recession. From an...
Congratulations! You have been appointed an economic policy adviser to the U.S. You are told that the economy is significantly underutilizing its available resources and that the following will happen the next year: World recession will continue and the prices of oil will increase significantly. These two events are explained by the following factors: Multiple Choice Lower domestic income and higher prices of input. Higher foreign income and lower prices of input. Lower foreing income and higher prices of inputs....
In an economy where the money supply and aggregate demand have been decreased by the Central Bank, you know that the Central Bank is using 答案选项组 a contractionary monetary policy. an expansionary monetary policy. a loose monetary policy. follow expansionary fiscal policy How does monetary policy affect the market? 答案选项组 Monetary policy has a more of an impact on consumption than investment. Monetary policy has a more of an impact on government spending than investment. Monetary policy has an indirect...
QUESTION 1 This question is answered in Class 3-3. With deposit insurance, banks are not concerned about bank runs. As a result, they can a. keep lower reserves, and lend more at lower interest rates. b. keep higher reserves, and lend more at lower interest rates. c. keep lower reserves, and lend less at higher interest rates. d. keep higher reserves, and lend less at lower interest rates. 1 points QUESTION 2 This question is answered in Class 3-4....
Congratulations one more time. You have been appointed chair of Economic Advisers in Fantasyland. Income is currently $600,000, unemployment is 5 percent, and there are signs of coming inflation. You rely on your research assistant for specific numbers. He tells you that potential income is $564,000 and the mpe is 0.5. a. The government wants to eliminate the inflationary gap by changing expenditures. What policy do you suggest? (Click to select)IncreaseDecrease government spending by $ or (Click to select)increasedecrease taxes...
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...
10.) Which of the following is an example of an automatic stabilizer? A. The reduction in the money supply that occurs as banks become less willing to make loans during a recession B. The reduction in real wages that occurs as the economy goes into a recession C. The increase in government spending that occurs as the result of new spending bills passed by Congress D. The rise in tax revenue that occurs as a result of growth in real...
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The LM curve represents A) the single level of output where the goods market is in equilibrium. B) the combinations of output and the interest rate where the goods market is in equilibrium. C) the single level of output where financial markets are in equilibrium. D) the combinations of output and the interest rate where the money market is in equilibrium. E) none of...
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The LM curve represents A) the single level of output where the goods market is in equilibrium. B) the combinations of output and the interest rate where the goods market is in equilibrium. C) the single level of output where financial markets are in equilibrium. D) the combinations of output and the interest rate where the money market is in equilibrium. E) none of the...