Monetary policy can be used in an attempt to correct a positive inflation shock. This is...
Monetary policy can be used in an attempt to correct a positive inflation shock. This is done with monetary _____ in the hope that the long-run inflation rate will be _____. A. tightening; higher B. tightening; lower C. easing; higher D. easing; lower
Homework Answers
In the case of a positive inflation shock, the monetary policy is used to bring down the inflation which would be done by tightening the monetary supply as it brings the price level down.
option(B)
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Monetary policy can be used in an attempt to correct a positive
inflation shock. This is...
Explain the net export effect of an expansionary monetary policy 6. What is a monetary rule? And what is the purpose of a monetary rule? If the current inflation rate is 2%, the real equilibrium...
Explain the net export effect of an expansionary monetary policy 6. What is a monetary rule? And what is the purpose of a monetary rule? If the current inflation rate is 2%, the real equilibrium federal fund rate 1.5%, target rate of inflation 2.5%, actual GDP $11 trillion, and potential GDP $ 15 trillion what should be the federal fund target rate? On what theory is this rule based? 7. What is quantitative easing ? And explain how QE can...
UESTION 38 When the Federal Reserve began its policy of quantitative easing in November 2008, the...
when the federal reserve began its policy of quan
UESTION 38 When the Federal Reserve began its policy of quantitative easing in November 2008, there wasin the monetary base. ︵ a a decline Ob. a dramatic increase c. no change O d. a slight increase QUESTION 42 monetary policy. In the current year, a shock has lowered the inflation rate from 1.5% The central bank of Substantia uses a price level target to conduct to 1.0%. Following the shock, firms...
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...
10. In the 1970s "Great Inflation", inflation was increased because Policy makers thought potential output was...
10. In the 1970s "Great Inflation", inflation was increased because Policy makers thought potential output was higher than it actually turned out to be and policy shifted the AD curve to the left Policy makers thought potential output was lower than it actually turned out a. b. to be and policy shifted the AD curve to the left Policy makers thought potential output was lower than it actually turned out to be and policy shifted the AD curve to the...
We have discussed two models that describe the relationship between inflation and economic growth. Which of the followi...
We have discussed two models that describe the relationship between inflation and economic growth. Which of the following is a property of the New Keynesian Model but NOT the Real Business Cycle (RBC) Model? Monetary policy has no effect on long run economic growth Recessions can be caused by a fall in aggregate demand. Prices are fully flexible in both the short and long run. All the above are properties of the RBC model. None of the above are properties...
Assume that a central bank attempts to lower the expected inflation by making its monetary policy...
Assume that a central bank attempts to lower the expected inflation by making its monetary policy more conservative. How would its decision to attempt to lower the domestic money supply affect the value of the domestic currency on the foreign exchange market, in both short and longer run
The government can reduce inflation with the help of both fiscal and monetary policy.
The government can reduce inflation with the help of both fiscal and monetary policy. An effective combination of these policies to reduce inflation would be to _______ and _______ Increase taxes; lower the reserve requirement ratio Increase taxes; sell government bonds Decrease taxes; buy government bonds Decrease government spending; lower discount rate
1. Is the Phillips curve a myth? Intertemporal tradeoff between inflation and unemployment After the World...
1. Is the Phillips curve a myth? Intertemporal tradeoff between inflation and unemployment After the World War II, empirical economists noticed that, in many advanced economies, as unemployment fell, inflation tended to rise, and vice versa. The inverse relationship between unemployment and Inflation, was depicted as the Phillips curve, after William Phillips of the London School of Economics. In the 1950s and 1960s, the Phillips curve convinced many policy makers that they could use the relationship to pick acceptable levels...
To correct high inflation, the Fed implements a _______ monetary policy, and _________ treasury securities in...
To correct high inflation, the Fed implements a _______ monetary policy, and _________ treasury securities in the open market. A. loose, sell B. loose, purchases C. tight, purchases D. tight, sells
Read the following article, relating to monetary policy and inflation in Japan, and answer the fo...
Read the following article, relating to monetary policy and inflation in Japan, and answer the following questions. TOKYO (Kyodo) -- The Bank of Japan on Wednesday cut its inflation forecasts for the three years through March 2021, putting its elusive target of 2 percent price gains farther from reach. As widely expected, the central bank's Policy Board also decided after a two-day meeting to keep interest rates at their current ultralow levels as risks including trade friction between the United...
Explain the net export effect of an expansionary monetary policy 6. What is a monetary rule? And what is the purpose of a monetary rule? If the current inflation rate is 2%, the real equilibrium federal fund rate 1.5%, target rate of inflation 2.5%, actual GDP $11 trillion, and potential GDP $ 15 trillion what should be the federal fund target rate? On what theory is this rule based? 7. What is quantitative easing ? And explain how QE can...
when the federal reserve began its policy of quan
UESTION 38 When the Federal Reserve began its policy of quantitative easing in November 2008, there wasin the monetary base. ︵ a a decline Ob. a dramatic increase c. no change O d. a slight increase QUESTION 42 monetary policy. In the current year, a shock has lowered the inflation rate from 1.5% The central bank of Substantia uses a price level target to conduct to 1.0%. Following the shock, firms...
10. In the 1970s "Great Inflation", inflation was increased because Policy makers thought potential output was higher than it actually turned out to be and policy shifted the AD curve to the left Policy makers thought potential output was lower than it actually turned out a. b. to be and policy shifted the AD curve to the left Policy makers thought potential output was lower than it actually turned out to be and policy shifted the AD curve to the...
1. Is the Phillips curve a myth? Intertemporal tradeoff between inflation and unemployment After the World War II, empirical economists noticed that, in many advanced economies, as unemployment fell, inflation tended to rise, and vice versa. The inverse relationship between unemployment and Inflation, was depicted as the Phillips curve, after William Phillips of the London School of Economics. In the 1950s and 1960s, the Phillips curve convinced many policy makers that they could use the relationship to pick acceptable levels...
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