When would the Federal Reserve engage in contractionary monetary policy?
a. never
b. when inflation is high
c. when unemployment is high
d. when gdp is low
When would the Federal Reserve engage in contractionary monetary policy? a. never b. when inflation is...
18. Suppose the Federal pose the Federal Reserve opted to implement monetary policy by decreasing the interest id on excess reserves. This would be an example of a. Expansionary monetary policy b. Contractionary monetary policy c. Discretionary monetary policy d. Exemplary monetary policy 19, A policy decision by the Federal Reserve to sell short-run U.S. securities out of the New York branch would be an example of a. Expansionary monetary policy through decreasing the federal funds rate b. Contractionary monetary...
the Federal Reserve Bank has two mandates when setting monetary policy - keep annual inflation around 2% and the unemployment rate around 5%. Typically, efforts to adjust the money supply to cause inflation to decrease causes unemployment to increase and vice versa. Now, imagine a situation where the United States faces high inflation and high unemployment (stagflation). What do you think the Fed should do in this situation? Your assignment is submit a 1-2 pages, in which you outline what...
Discuss the goals of expansionary and contractionary monetary policies used by the Federal Reserve Bank and the approaches (called monetary policy tools) used to achieve each policy. Also, discuss the effect of each policy on GDP, price level, private investment (investment in capital acquisition by firms and housing by households), and net trade.
If you were the Federal Reserve chairman, which monetary policy would you advise the federal government to adopt? Explain why. o Return to the classical gold standard o A gold price targeting policy o A monetary rule (i.e., increase the M2 money supply at a steady rate equal to the long-term real GDP growth rate, and allow interest rates to fluctuate without interference. o Price inflation target, i.e., set a maximum price inflation target, based on the Consumer Price Index...
WEEK 6: MONETARY POLICY AND FISCAL POLICY A healthy economy typically has low rates of unemployment and steady prices. Low rates of unemployment means that the economy is operating at its full potential. To ensure the economy continues to operate at potential GDP (full capacity where all savings are invested in production functions, and where all those who wish to work can find a job, and all other factors of production are fully utilized in the production function), governments use...
Question 16 The Federal Reserve uses a variety of monetary policy tools to achieve which of the following goal(s)? a bull market, new companies, and fair trade low unemployment, price stability and sustainable economic growth full employment, zero inflation and and a trade surplus high stock prices, rapid growth, and a trade surplus
Which kind of monetary policy would you expect in response to high inflation: expansionary or contractionary? Group of answer choices either could be deployed contractionary neither expansionary
1. List and explain the 3 tools of Federal Reserve Monetary Policy. 2. Explain how the Federal Reserve would use expansionary monetary policy to close a recessionary gap. Explain how the money supply, interest rate, investment spending, consumer spending, aggregate demand, real GDP, unemployment, and price level is affected. Illustrate this graphically below
Can you explain how the Federal Reserve utilizes each of the four monetary policy tools to implement an expansionary monetary policy and contractionary monetary policy?
because it doesn't need approval 1. The Federal Reserve is when making monetary policy decisions. a. decentralized; presidential and congressional b. independent within government; presidential and congressional c. decentralized; private sector d. independent within government; foreign 2. The organization within the Federal Reserve that determines monetary policy is: a. the Board of Governors b. the New York Federal Reserve District Bank c. the Federal Open Market Committee d. the Federal Monetary Control Committee 3. The Federal Reserve system hasdistrict banks....