Unlike the Federal Reserve, the European Central Bank's (ECBs) primary mandate is to promote price stability...
Unlike the Federal Reserve, the European Central Bank's (ECBs) primary mandate is to promote price stability (low inflation). In response to a negative technology shock (negative real shock), like the one that associated with the Great Recession, we would expect the ECB to
Group of answer choices
decrease the growth rate of the money supply and push real GDP growth lower.
decrease the growth rate of the money supply and push real GDP growth higher.
increase the growth rate of the money supply and push real GDP growth lower.
increase the growth rate of the money supply and push real GDP growth higher.
Homework Answers
Decrease the growth rate of the money supply and push real GDP growth lower.
Option A is correct. This is because as there is negatuve supply shock, SRAS shift to the lefy which create inflation in the economy. To eliminate this ECB shift the AD curve by decreasinv the money supply and lower the GDP growth rate
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Unlike the Federal Reserve, the European Central Bank's (ECBs)
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Reserve Chairman Janet L. Yellen announced the Federal Reserve was
raising its benchmark rate (the federal funds rate) by a quarter of
a percentage point (to a range of 0.75-1.00 percent). This was the
third time the Fed has raised rates after the Great Recession.
Image result for fed will raise rates Consider the aggregate
demand-aggregate supply diagram below, which represents the
macroeconomy. Suppose the market is initially at an equilibrium at
point A. What...
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We have discussed two models that describe the relationship between inflation and economic growth. Which of the followi...
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"The money supply of an economy increases when the central bank simultaneously decreases the reserve requirement...
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Circle the best answer 1. The purchase of Treasury securities by the Federal Reserve will, in...
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42. On a given aggregate demand curve, if the rate of spending growth is 10% and the growth rate of the money supply is 2%, then the velocity of money must be growing at: A) 5% B) 8%. 12%. D) 20% 43. According to the quantity theory of money, if both the growth rate of the money supply and the velocity of money are fixed, then a higher inflation rate means: A) a higher real growth rate. B) no change...
On March 15, 2017, Federal
Reserve Chairman Janet L. Yellen announced the Federal Reserve was
raising its benchmark rate (the federal funds rate) by a quarter of
a percentage point (to a range of 0.75-1.00 percent). This was the
third time the Fed has raised rates after the Great Recession.
Image result for fed will raise rates Consider the aggregate
demand-aggregate supply diagram below, which represents the
macroeconomy. Suppose the market is initially at an equilibrium at
point A. What...
On March 15, 2017, Federal Reserve Chairman Janet L. Yellen announced the Federal Reserve was raising its benchmark rate (the federal funds rate) by a quarter of a percentage point (to a range of 0.75-1.00 percent). This was the third time the Fed has raised rates after the Great Recession. Consider the market for money illustrated in the figure below. Assume the market initially just prior to March 15, 2017) is in equilibrium at point A. Describe the effects of...
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