In classical theory, monetary policy A) is useful to stabilize the financial system B) is unnecessary...
In classical theory, monetary policy
A) is useful to stabilize the financial system B) is unnecessary as the econony self-corrects to any shocks C) will increase aggregate supply in the short run. D) will not affect the aggregate demand curve.
Homework Answers
Classical economics emphasises the fact that free markets lead to an efficient outcome . Classical economics assumes the long run aggregate supply curve is inelastic in nature . So any deviation from full employment will only be temporary and ultimately the economy reaches full employment on its own . Classical economics places little emphasis on the use of fiscal policy to manage aggregate demand . Classical theory is the basis for Monetarism . It concentrates on managing the money supply, through monetary policy . According to Classical , supply creates its own demand . The classical economists' opinion of monetary policy is based on the quantity theory of money , or that money supply only affects price level .
A) is useful to stabilize the financial system
Add Answer to:
In classical theory, monetary policy
A) is useful to stabilize the financial system B) is unnecessary...
Should policymakers use monetary policy, fiscal policy, or both in an effort to stabilize the economy?
Use of discretionary policy to stabilize the economy Should policymakers use monetary policy, fiscal policy, or both in an effort to stabilize the economy? The following questions address the issue of how monetary and fiscal policies affect the economy and the pros and cons of using these tools to lessen economic fluctuations. The following graph shows a hypothetical aggregate demand curve (AD), short-run aggregate supply curve (AS), and long-run aggregate supply curve (LRAS) For the economy in May 2020. According to the...
Should the government use monetary and fiscal policy in an effort to stabilize the economy?
7. Use of discretionary policy to stabilize the economy Should the government use monetary and fiscal policy in an effort to stabilize the economy? The following questions address the issue of how monetary and fiscal policies affect the economy, and the pros and cons of using these tools to combat economic fluctuations. The following graph shows a hypothetical aggregate demand curve (AD), short-run aggregate supply curve (AS), and long-run aggregate supply curve (LRAS) for the U.S. economy in April 2020. Suppose the government...
The classical dichotomy and monetary neutrality are represented graphically by an upward-sloping short-run aggregate-curve. a vertical long-run aggregate-supply...
The classical dichotomy and monetary neutrality are represented graphically by an upward-sloping short-run aggregate-curve. a vertical long-run aggregate-supply curve. an upward-sloping long-run aggregate-supply curve. a downward-sloping aggregate-demand curve.
Hello all, looking for some help on these monetary policy theory practice questions. Thank you! 1.)...
Hello all, looking for some help on these monetary policy theory practice questions. Thank you! 1.) The aggregate demand curve is kinked at _____ (the zero lower bound / the zero inflation rate) because an inflation rate decreases the real-interest rate (increases / decreases); thus decreasing the aggregate quantity demanded. 2.) The Abenomics program sought to lower financial frictions through the purchase of long-term assets. What is the purpose of lowering financial frictions? Lowering financial frictions would _____ on investments...
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...
8. Using policy to stabilize the economy 8. Using policy to stabilize the economy The government...
8. Using policy to stabilize the economy
8. Using policy to stabilize the economy The government has the ability to influence the level of output in the short run using monetary and fiscal policy. There is some disagreement as to whether the government should attempt to stabilize the economy. Which of the following are arguments in favor of active stabilization policy by the government? Check all that apply. Shifts in aggregate demand are often the result of waves of pessimism...
28. Contractionary monetary policy. raises; decreasing; supply of loanable funds b. the interest rates, by a....
28. Contractionary monetary policy. raises; decreasing; supply of loanable funds b. the interest rates, by a. raises; increasing; demand for loanable funds lowers; decreasing; short-run aggregate supply d. ralia c. lowers; increasing; aggregate demand raises; increasing; long-run aggregate supply e.
Monetarists and classical economists: a. assume that the economy operates at full employment and stimulative monetary...
Monetarists and classical economists: a. assume that the economy operates at full employment and stimulative monetary policy will increase both aggregate supply and aggregate demand. b. assume the economy operates at full employment and stimulative monetary policy will only cause the price level to rise. c. assume that stimulative monetary policy will create high levels of GDP without inflation. d. assume that stimulative monetary policy will create high levels of GDP and slightly high prices.
Which of the following is a monetary policy intended to rein in inflation? a. Reduce interest...
Which of the following is a monetary policy intended to rein in inflation? a. Reduce interest rates to increase investment spending b. Increase the money supply to shift the aggregate demand curve rightward c. Reduce the interest paid on banks' reserves d. Decrease the money supply to shift the aggregate demand curve leftward
The interest-rate-based approach to the monetary policy transmission mechanism says that a change in the money...
The interest-rate-based approach to the monetary policy transmission mechanism says that a change in the money supply influences aggregate demand by A: a change in interest rates, which changes investment. B: a change in interest rates, which changes the money supply. C: changing consumer consumption behavior as they adjust to a change in the number of dollars available. D: leading to shifts of the short-run aggregate supply curve.
Use of discretionary policy to stabilize the economy Should policymakers use monetary policy, fiscal policy, or both in an effort to stabilize the economy? The following questions address the issue of how monetary and fiscal policies affect the economy and the pros and cons of using these tools to lessen economic fluctuations. The following graph shows a hypothetical aggregate demand curve (AD), short-run aggregate supply curve (AS), and long-run aggregate supply curve (LRAS) For the economy in May 2020. According to the...
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...
8. Using policy to stabilize the economy
8. Using policy to stabilize the economy The government has the ability to influence the level of output in the short run using monetary and fiscal policy. There is some disagreement as to whether the government should attempt to stabilize the economy. Which of the following are arguments in favor of active stabilization policy by the government? Check all that apply. Shifts in aggregate demand are often the result of waves of pessimism...
28. Contractionary monetary policy. raises; decreasing; supply of loanable funds b. the interest rates, by a. raises; increasing; demand for loanable funds lowers; decreasing; short-run aggregate supply d. ralia c. lowers; increasing; aggregate demand raises; increasing; long-run aggregate supply e.
Most questions answered within 3 hours.
-
A 5.20 mW helium neon laser emits a visible laser beam with a
wavelength of 633...
asked 2 minutes ago -
Assignment:
Your
organization has made a strategic decision
to
outsourcework
currently performed in house. You have...
asked 54 seconds ago -
A hospital performs 100 surgeries per week. The probability that
complications after surgery occur is 10%....
asked 1 minute ago -
In preparing its cash flow statement for the year ended December
31, 2018, Green Co. gathered...
asked 3 minutes ago -
Donna is 18 years old and full time accounting student.She is
saving for an overseas holiday...
asked 3 minutes ago -
Service-oriented architectures (SOA) provide
object-oriented architectures for web platforms that represent a
collection of services. SOA...
asked 4 minutes ago -
Le Terroir Winery is considering an expansion project to produce
fine wines. The trial expansion will...
asked 13 minutes ago -
The Bahraini public budget experiences deficit in the last
seven years, what are procedures are taken...
asked 20 minutes ago -
You invested $30,000 in a mutual fund at the beginning of the
year when the NAV...
asked 24 minutes ago -
Would you expect the price elasticity of supply for guitars to
be more inelastic in the...
asked 26 minutes ago -
A snowmobile is originally at the point with position vector
30.1 m at 95.0° counterclockwise from...
asked 25 minutes ago -
MAN3240 Organizational Behavior
In one to two paragraphs
6.) How can understanding emotions make me more...
asked 34 minutes ago