Homework Answers
Ans) Contractionary monetary policy is used to combat inflation. In contractionary monetary policy, money supply is reduced, interest rate is increased or central bank sells government securities. This reduces aggregate demand and AD curve shifts to the left.
Add Answer to:
A central bank implements a contractionary monetary policy over worries that inflation will undermine further economic...
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...
A central back engages in tight monetary policy in order to prevent inflation from undermining economic...
A central back engages in tight monetary policy in order to prevent inflation from undermining economic growth. Shift the aggregate demand (AD) curve on the graph below to show the impact of this policy on the economy. Provide your answer below: Price Level Aggregate Supply Aggregate Demand Real GDP QUESTION 25 - 1 POINT A healthy economic climate usually involves some sort of market orientation at the making level. individual, or firm decision- Select the correct answer below: O macroeconomic...
6. The long-run effects of monetary policy Aa Aa The following graphs show an economy that is cur...
6. The long-run effects of monetary policy The following graphs show an economy that is currently in long-run equilibrium. The first graph shows the aggregate demand (AD) and long-run aggregate supply (LRAS) curves. The second shows the long-run (LR) and short-run (SR) Phillips curves. The point on each graph shows the economy's current position. According to the graphs, potential output in this economy is _______ and the natural rate of unemployment is _______ .Suppose the central bank of the economy decreases the...
Macroeconomics Monetary Policy Questions The below information shows that economy needs corrective actions by the Central...
Macroeconomics Monetary Policy Questions
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.
Explain the linkages in causal chain when the central bank conducts a contractionary monetary policy. what...
Explain the linkages in causal chain when the central bank conducts a contractionary monetary policy. what will be the ultimate effect on GDP?
1.)Suppose a removal of a government regulation on the safety of goods produced in the US...
1.)Suppose a removal of a government regulation on the safety of
goods produced in the US cause foreigners to become less confident
about products made in America; illustrate the effect of this on
the American economy by shifting the aggregate demand (AD) curve in
the appropriate direction.
2.)
A favorable economic outlook is shared in an announcement in the
news by the government. Consumers are now confident about the
future strength of the economy and the availability of jobs;
illustrate...
During a recession, economists traditionally focus on monetary and fiscal policies to bolster the economy. a. Use t...
During a recession, economists traditionally focus on monetary and fiscal policies to bolster the economy. a. Use the aggregate demand - aggregate supply (AD-AS) model in Panel A to show the effect of a tax cut, in the form of a tax rebate, given to each taxpayer. If inflation is high during a recession, some economists advocate cuts on marginal tax rates, to help avoid additional inflation. b. Use the AD-AS model in Panel B to show the effect of...
2. Suppose the economy is in long-run equilibrium, with real GDP at $19 trillion and the unemployment rate at 5%. Now assume that the central bank unexpectedly decreases money supply by 6%. a) Illust...
2. Suppose the economy is in long-run equilibrium, with real GDP at $19 trillion and the unemployment rate at 5%. Now assume that the central bank unexpectedly decreases money supply by 6%. a) Illustrate the short-run effects of the monetary policy by using aggregate demand-aggregate supply model. Be sure to indicate the direction of change in real GDP, the price level and the unemployment rate. b) Illustrate the long-run effects of the monetary policy by using aggregate demand-aggregate supply model....
Macroeconomic Multiple Choice Questions Answer All 10 Questions* 1) If the Central Bank of Kuwait puts...
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...
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? a. Changes in the money supply b. Slope of the aggregate supply curve c. Rate of change of interest rate d. Total money supply in the economy
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 back engages in tight monetary policy in order to prevent inflation from undermining economic growth. Shift the aggregate demand (AD) curve on the graph below to show the impact of this policy on the economy. Provide your answer below: Price Level Aggregate Supply Aggregate Demand Real GDP QUESTION 25 - 1 POINT A healthy economic climate usually involves some sort of market orientation at the making level. individual, or firm decision- Select the correct answer below: O macroeconomic...
Macroeconomics Monetary Policy Questions
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.)Suppose a removal of a government regulation on the safety of
goods produced in the US cause foreigners to become less confident
about products made in America; illustrate the effect of this on
the American economy by shifting the aggregate demand (AD) curve in
the appropriate direction.
2.)
A favorable economic outlook is shared in an announcement in the
news by the government. Consumers are now confident about the
future strength of the economy and the availability of jobs;
illustrate...
During a recession, economists traditionally focus on monetary and fiscal policies to bolster the economy. a. Use the aggregate demand - aggregate supply (AD-AS) model in Panel A to show the effect of a tax cut, in the form of a tax rebate, given to each taxpayer. If inflation is high during a recession, some economists advocate cuts on marginal tax rates, to help avoid additional inflation. b. Use the AD-AS model in Panel B to show the effect of...
2. Suppose the economy is in long-run equilibrium, with real GDP at $19 trillion and the unemployment rate at 5%. Now assume that the central bank unexpectedly decreases money supply by 6%. a) Illustrate the short-run effects of the monetary policy by using aggregate demand-aggregate supply model. Be sure to indicate the direction of change in real GDP, the price level and the unemployment rate. b) Illustrate the long-run effects of the monetary policy by using aggregate demand-aggregate supply model....
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...
Most questions answered within 3 hours.
-
Fiscal stimulus is weaker in an open economy because the
greater aggregate demand resulting from the...
asked 1 second ago -
Identify the components of replication, transcription, and
translation processes.
Replication
transcription
translation
DNA polymerase, deoxynucleoside triphosphate,...
asked 3 minutes ago -
A lady stands at the edge of a 50 m cliff and throws a ball
straight...
asked 12 minutes ago -
a school is 4 blocks east and 4 blocks south of a student's
home, how many...
asked 32 minutes ago -
How many discs of one-inch diameter can you fit in a rectangle
of size 5 inches...
asked 29 minutes ago -
Calc+ Company manufactures calculators for schools. The master
budget is based on sales of 40,000 units...
asked 17 minutes ago -
You are assigned to a long-term overseas assignment. Despite
your initial excitement about becoming a bi-cultural...
asked 26 minutes ago -
python.. write a program which does multiplication on binary
numbers
asked 30 minutes ago -
Fatty acids are the building blocks of?
cholesterol
phospholipids
glycolipids
phospholipids and glycolipids.
asked 31 minutes ago -
A big fish, mbig fish=2.4kg, swimming with a speed of
vbig=0.18ms swallows a smaller fish msmall...
asked 31 minutes ago -
Two samples are taken with the following numbers of successes
and sample sizes
r1 = 27...
asked 34 minutes ago -
You are provided a convex (+) thin lens and an object where a
real image at...
asked 42 minutes ago