1. Why should monetary policy be made by rule rather than discretion?
a. |
because there is a clear consensus among economists about what a good monetary policy rule would be |
b. |
because rules would eliminate the political business cycle |
c. |
because rules respond to any random shocks in the economy |
d. |
because rules create time inconsistency |
2. Why does Canadian public policy discourage saving?
a. |
because, other things the same, taxes increase the return from savings |
b. |
because means-tested programs such as Old Age Security provide greater benefits to those who saved |
c. |
because some forms of capital income are not taxed |
d. |
because capital gains are taxed heavily |
3. Which of the following is an argument against a tax system that encourages savings?
a. |
that individuals know better that the government how much to save |
b. |
that saving is not an important determinant of a nation's ability to produce output |
c. |
that rich people would bear the burden of such a tax system |
d. |
that such a tax system would increase inequality |
Q1 option A is correct
Nnew classicals and real business cycle supports believe that discretionary monetary policy has no significant effect on output and employment which cannot be achieved by aggregate demand management .
Q2 option B
Q3 option B
Idle Savings acts as leakages in the economy which leads to lower production and output
1. Why should monetary policy be made by rule rather than discretion? a. because there is...
2. Rules versus discretion This question addresses the issue of whether monetary policy should be made by discretionary policy or be implemented according to a set of rules. Which of the following statements reflect arguments in favor of policy by rule rather than discretion? Check all that apply. Monetary rules reduce the flexibility of the Federal Reserve. It is impossible for a policy rule to consider all the possible scenarios and specify, in advance, the right policy response. It is...
27. Why does Canadian public policy discourage saving? because, other things the same, taxes increase the return from savings b. because means-tested programs such as Old Age Security provide greater benefits to those who saved because some forms of capital income are not taxed d. because capital gains are taxed heavily c.
27. Why does Canadian public policy discourage saving? a. because, other things the same, taxes increase the return from savings b. because means-tested programs such as Old Age Security provide greater benefits to those who saved because some forms of capital income are not taxed d. because capital gains are taxed heavily c. TITI
Rules dominate discretion in monetary policy because ______. A. discretionary monetary policy requires a stable velocity of money, and the velocity of money is extremely volatile B. rules bring greater certainty about future policy actions C. discretionary monetary policy requires coordination with discretionary fiscal policy D. discretionary monetary policy requires a stable monetary base and the monetary base is constantly increasing
The following table shows two monetary policy rules. Inflation Policy Rule 1 Targeet Overnight Rate Policy Rule 2 Target Overnight Rate 0 1 3 2 3 5 4 5 7 6 7 9 8 9 11 a. Graph the two policy rules. Suppose the Bank of Canada shifts from policy rule 1 to policy rule 2. b. For any given rate of inflation, what happens to the interest rate because of this change in policy? What happens to the...
II. Monetary Policy and Explanation: ots. FEDERAL TAX SYSTEM. Tax 1. If the net profit from your business was $10,000 for this year and you added it to your personal taxable income of $135,000 for this year, according to the tax tables used in class, how much tax would you owe? a. Tax 1) Total Income (wages + capital gain profit from business + Interest income.) Exemption amount (Subtract from Total Income) Adjusted Gross Income (AGI) Family 1 (Does not...
Question 1: According to Milton Friedman, the reason there are two Phillips curves is because a. prices are inflexible. b. the expected inflation rate does not instantaneously adjust to changes in the actual inflation rate. c. the expected inflation rate is equal to 1 minus the actual inflation rate. d. the expected inflation rate adjusts to changes in the actual inflation rate. Question 2: Milton Friedman argued that there a, are two Phillips curves, a short-run one and a long-run...
Because of its inability to control film and personnel costs in its radiology department, Sanger General Hospital wants to replace its existing picture archive and communication (PAC) system with a newer version. The existing system, which has a current book value of $2,250,000, was purchased three years ago for $3,600,000 and is being depreciated on a straight-line basis over an eight-year life to a salvage value of $0. This system could be sold for $800,000 today. The new PAC system...
A homeowners' policy will typically pay up to $500 per plant that is damaged by a covered peril. This is an example of: an aggregate dollar limit an open perils dollar limit C. a specific dollar limit a mixed dollar limit none of the above e. You purchase an annuity for which you will make one payment of $15,000 on your 50 birthday. The annuity will start paying you $400 a month on your 67" birthday until you die. What...
I need Summary of this Paper i dont need long summary i need What methodology they used , what is the purpose of this paper and some conclusions and contributes of this paper. I need this for my Finishing Project so i need this ASAP please ( IN 1-2-3 HOURS PLEASE !!!) SPECIAL ARTICLES tole of Monetary Policy C Rangarajan What should be the objectives of monetary policy? Does the objective of price stability conflict with the goal of achieving...