Homework Answers
Answer
Option B
the same as that of the target currency
The implementation is successful means the target rate of inflation is possible and that the target rate of inflation is equal to the target currency as both currencies keep constant purchasing power parity.
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If a central bank implements an exchange rate targeting policy successfully, the country's inflation rate is...
1) Under inflation targeting, a central bank must pursue policies that Select one: A. keep the...
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...
In general, any central bank has two alternative approaches for implementing its monetary policy. These alternatives...
In general, any central bank has two alternative approaches for implementing its monetary policy. These alternatives are O A. targeting the money supply or pursuing a stabilization policy OB. targeting the money supply or choosing an output-gap target. O c. choosing an exchange-rate target or shortening long and variable lags. O D. choosing an output-gap target or targeting the interest rate O E. targeting the money supply or targeting the interest rate
A central bank implements a contractionary monetary policy over worries that inflation will undermine further economic...
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
20. When a country's exchange rate depreciates, the price of: A: that country's goods abroad decreases...
20. When a country's exchange rate depreciates, the price of: A: that country's goods abroad decreases B: that country's goods abroad increases C: foreign goods sold in the country increases D: that country's goods produced and sold locally increases 21. A central bank may seek to influence its country's currency by: A: imposing limits on the number of goods that may be imported B: restricting the outflow of funds from the home country C: intervening directly in the FX market...
Which central bank has its exchange rate as a focus of its monetary policy? A. Bank...
Which central bank has its exchange rate as a focus of its monetary policy? A. Bank of Canada B. European Central Bank C. Bank of England D. Federal Reserve
10. In the 1970s "Great Inflation", inflation was increased because Policy makers thought potential output was...
10. In the 1970s "Great Inflation", inflation was increased because Policy makers thought potential output was higher than it actually turned out to be and policy shifted the AD curve to the left Policy makers thought potential output was lower than it actually turned out a. b. to be and policy shifted the AD curve to the left Policy makers thought potential output was lower than it actually turned out to be and policy shifted the AD curve to the...
and Suppose a country's central bank announces that it is increasing the money growth rate. The...
and Suppose a country's central bank announces that it is increasing the money growth rate. The country's currency will suddenly its rate of depreciation will then appreciate; rise appreciate; fall depreciate; rise O depreciate; fall
Assume that a central bank attempts to lower the expected inflation by making its monetary policy...
Assume that a central bank attempts to lower the expected inflation by making its monetary policy more conservative. How would its decision to attempt to lower the domestic money supply affect the value of the domestic currency on the foreign exchange market, in both short and longer run
Supposed that the targeted inflation rate by the Central Bank is 3%. However, a positive supply...
Supposed that the targeted inflation rate by the Central Bank is 3%. However, a positive supply shocks and a contraction of aggregate demand has caused the current level of inflation rate is below than its targeted level. a. Using IS-PC-MR model, explain how the central bank stabilize the inflation rate. b. Discuss the relationship between the central bank preferences with the two strategies to stabilize the inflation rate, namely a ‘cold turkey’ and ‘gradualist’. c. Explain the cost and the...
The sum of currency and bank deposits at the central bank is called: a. the money...
The sum of currency and bank deposits at the central bank is called: a. the money supply. b. domestic assets. c. the monetary base. d. fractional reserves. Official intervention in the foreign exchange market to defend a fixed exchange rate when the value of the country's currency is under downward pressure causes a. international reserve holdings to rise. b. a downward pressure on the country's interest rates. c.an increase in the liabilities of the central bank. d. the domestic money...
In general, any central bank has two alternative approaches for implementing its monetary policy. These alternatives are O A. targeting the money supply or pursuing a stabilization policy OB. targeting the money supply or choosing an output-gap target. O c. choosing an exchange-rate target or shortening long and variable lags. O D. choosing an output-gap target or targeting the interest rate O E. targeting the money supply or targeting the interest rate
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
20. When a country's exchange rate depreciates, the price of: A: that country's goods abroad decreases B: that country's goods abroad increases C: foreign goods sold in the country increases D: that country's goods produced and sold locally increases 21. A central bank may seek to influence its country's currency by: A: imposing limits on the number of goods that may be imported B: restricting the outflow of funds from the home country C: intervening directly in the FX market...
10. In the 1970s "Great Inflation", inflation was increased because Policy makers thought potential output was higher than it actually turned out to be and policy shifted the AD curve to the left Policy makers thought potential output was lower than it actually turned out a. b. to be and policy shifted the AD curve to the left Policy makers thought potential output was lower than it actually turned out to be and policy shifted the AD curve to the...
and Suppose a country's central bank announces that it is increasing the money growth rate. The country's currency will suddenly its rate of depreciation will then appreciate; rise appreciate; fall depreciate; rise O depreciate; fall
The sum of currency and bank deposits at the central bank is called: a. the money supply. b. domestic assets. c. the monetary base. d. fractional reserves. Official intervention in the foreign exchange market to defend a fixed exchange rate when the value of the country's currency is under downward pressure causes a. international reserve holdings to rise. b. a downward pressure on the country's interest rates. c.an increase in the liabilities of the central bank. d. the domestic money...
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