Question

QUESTION 25

“Monetized debt” results from

    a.    money illusion
    b.    financing deficits with true borrowing
    c.    a central bank purchasing its government’s bonds
    d.    the Treasury Department purchasing bonds issued by the Federal Reserve
    e.    increasing in the money faster than the rate of growth of real GDP

QUESTION 26
What is the primary responsibility of the Federal Reserve?

    a.    keep interest rates low
    b.    make sure that real GDP is adequate
    c.    maintain the exchange rate of the dollar in foreign currency markets
    d.    keep inflation low

QUESTION 27

A wage of $17 per hour in 1995 would be worth how much in 1997 dollars?   Use the index presented here.

                Index
                (1992 = 100)

                1994 = 141
                1995 = 131
                1996 = 165
                1997 = 174
                1998=   161

    a. $11.52
    b. $19.59
    c. $25.67
    d. $$14.75
    e. $22.58
    f. $12.34
    g. $24.65

    e.    act as a lender of last resort
    f.    maintain the gold backing of the currency

QUESTION 28

Friedman argued that if the economy was left alone, it would

    a.    go into a permanent recession
    b.    experience stagflation
    c.    grow rapidly, but wages would lag prices and workers would loose jobs to technological change
    d.    operate at or near full employment
    e.    create a society of the very rich and the very poor

only 10 min left to complete this assignment. please help

Answer 1

25. The answer is C. Monetizing debt result from Central bank purchasing Government bonds to finance there deficit.

26. The answer is D. The primary responsibility of Federal reserve is to achieve price stabilty(inflation) and maximize employment in the economy

27. The answer is E "22.58"

wage in 1995 is 17 $ per hour

CPI in 1995 = 131

CPI in 1997 = 174

wages in 1997 = CPI in 1997 / CPI in 1995 * 17

= 174 / 131 * 17

= 22.58$

28. The answer is A. Milton friedman argued that if the economy is left alone, it would go into a permanent recession

Milton friedman was a Americal monetarist economist who emphasised the use of monetary policy in the growing economy. He believes that in an economy everything is monetary phenonena & money supply can be used to put the economy out of recession.