When the economy is in recession, which of the following is likely to happen ? 1-...
When the economy is in recession, which of the following is likely to happen ?
1- Candidates will rise more money, since elections are more likely to be close.
2-The federal reserve will lower the interest rate
3-congress will cut government spending
4- the federal reserve will raise interest rates
5- congress will loosen immigration laws
choose the correct
Homework Answers
Correct Answer - Option B - The federal reserve will lower the interest rate.
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When the economy is in recession, which of the following is
likely to happen ?
1-...
1) Suppose that the national economy is experiencing a recession with an estimated recessionary gap of...
1) Suppose that the national economy is experiencing a recession with an estimated recessionary gap of $10 billion. Congress is considering the use of fiscal policy to ease the recession, and due to current political sentiments, it has determined that the maximum spending increase the government is willing to support is $3 billion. The government wants to make up the remainder of the recessionary gap using tax cuts. If a spending increase of $3 billion is approved and the MPC...
8. When the Fed provides funds to troubled banks that cannot find any other sources of...
8. When the Fed provides funds to troubled banks that cannot find any other sources of funds, it is acting as O A. the lender of last resort. OB. the bureau de change. O c. the Federal Deposit Insurance Corporation. OD. the interbank clearinghouse. 9. Suppose in the Republic of Sasquatch that the regulation of banking rested with the Sasquatchian Congress, including the determination of the reserve ratio. The Central Bank of Sasquatch is charged with regulating the money supply...
Expansionary fiscal policy ________________ to fight______________. increase the money supply and cut interest rates, recession. decrease...
Expansionary fiscal policy ________________ to fight______________. increase the money supply and cut interest rates, recession. decrease the money supply and raise interest rates, inflation. increase government spending and cut taxes, recession. decrease government spending and raise taxes, inflation.
1. To stimulate economic activity during a severe recession, the strongest appropriate fiscal policy is: a....
1. To stimulate economic activity during a severe recession, the strongest appropriate fiscal policy is: a. an increase in taxes and/or an increase in government spending b. an increase in taxes and/or a decrease in government spending! c. a decrease in taxes and/or an increase in government spending d. a decrease in taxes and/or a decrease in government spending e. a decrease in government purchases and/or a decrease in transfer payments 2. An increase in income tax rates: a. makes...
If the government is required to balance the budget and the economy falls into a recession,...
If the government is required to balance the budget and the economy falls into a recession, which of the actions is a feasible policy response? O invest in infrastructure O increase government spending to stimulate the economy O cut taxes to encourage consumer spending O cut spending equal to the reduction in tax revenue What is a likely consequence of this policy? The negative consequences of the recession are magnified. Unemployment falls due to the economic stimulus. There is hyperinflation...
f contractionary monetary policy is used, then which of the following would be most likely to...
f contractionary monetary policy is used, then which of the following would be most likely to enhance the effect of the contractionary policy on aggregate demand? Interest rates would increase, leading to an exchange rate appreciation and a fall in net exports. Interest rates would decrease, leading to an exchange rate appreciation and a fall in net exports. Interest rates would decrease, leading to an exchange rate depreciation and a rise in net exports. Interest rates would increase, leading to...
When an economy is experiencing a recession and the MPC = 4/5, a $5 billion dollar increase in government spending will cause output to increase by
1. When an economy is experiencing a recession and the MPC = 4/5, a $5 billion dollar increase in government spending will cause output to increase by $20 billion $400 million $25 billion $160 million2. Which of the following is the most frequently used monetary policy tool of the Federal Reserve to change the money supply? the discount rate open market operations changing tax rates the required reserve ratio3. During the 2008-2009 recession, the Federal Reserve provided additional liquidity into the financial system. This ultimately reduced the federal funds rate, which...
Which one of these events is MOST likely to raise interest rates in the economy? Select...
Which one of these events is MOST likely to raise interest rates in the economy? Select one: a. The Fed buying government bonds through an Open Market Operation b. Prices in the economy falling during an economic depression c. The Fed lowering the Federal Funds Rate d. The Fed raising the Required Reserves Ratio e. National income falling during a recession
6. (Problem 6) An economy is facing the inflationary gap shown in the accompanying diagram. Aggregate...
6. (Problem 6) An economy is facing the inflationary gap shown in the accompanying diagram. Aggregate price level LRAS SRAS Real GDP Potential —YpY output To eliminate the gap, should the central bank use expansionary or contractionary monetary policy? How will the interest rate, investment spending, consumer spending, real GDP, and the aggregate price level change as monetary policy closes the inflationary gap? The central bank can use contractionary monetary policy. The interest rate will rise, which would encourage a...
can you answer question 15 & 16 QUESTION 15 Suppose that the Federal Reserve believes the...
can
you answer question 15 & 16
QUESTION 15 Suppose that the Federal Reserve believes the economy is growing too fast and engages in contractionary monetary policy. What happens to the money supply and interest rates in the money market? A. The money supply increases and interest rates fall. B. The money supply increases and interest rates rise. C. The money supply decreases and interest rates fall. D. The money supply decreases and interest rates rise. QUESTION 16 Suppose the...
8. When the Fed provides funds to troubled banks that cannot find any other sources of funds, it is acting as O A. the lender of last resort. OB. the bureau de change. O c. the Federal Deposit Insurance Corporation. OD. the interbank clearinghouse. 9. Suppose in the Republic of Sasquatch that the regulation of banking rested with the Sasquatchian Congress, including the determination of the reserve ratio. The Central Bank of Sasquatch is charged with regulating the money supply...
1. To stimulate economic activity during a severe recession, the strongest appropriate fiscal policy is: a. an increase in taxes and/or an increase in government spending b. an increase in taxes and/or a decrease in government spending! c. a decrease in taxes and/or an increase in government spending d. a decrease in taxes and/or a decrease in government spending e. a decrease in government purchases and/or a decrease in transfer payments 2. An increase in income tax rates: a. makes...
If the government is required to balance the budget and the economy falls into a recession, which of the actions is a feasible policy response? O invest in infrastructure O increase government spending to stimulate the economy O cut taxes to encourage consumer spending O cut spending equal to the reduction in tax revenue What is a likely consequence of this policy? The negative consequences of the recession are magnified. Unemployment falls due to the economic stimulus. There is hyperinflation...
f contractionary monetary policy is used, then which of the following would be most likely to enhance the effect of the contractionary policy on aggregate demand? Interest rates would increase, leading to an exchange rate appreciation and a fall in net exports. Interest rates would decrease, leading to an exchange rate appreciation and a fall in net exports. Interest rates would decrease, leading to an exchange rate depreciation and a rise in net exports. Interest rates would increase, leading to...
6. (Problem 6) An economy is facing the inflationary gap shown in the accompanying diagram. Aggregate price level LRAS SRAS Real GDP Potential —YpY output To eliminate the gap, should the central bank use expansionary or contractionary monetary policy? How will the interest rate, investment spending, consumer spending, real GDP, and the aggregate price level change as monetary policy closes the inflationary gap? The central bank can use contractionary monetary policy. The interest rate will rise, which would encourage a...
can
you answer question 15 & 16
QUESTION 15 Suppose that the Federal Reserve believes the economy is growing too fast and engages in contractionary monetary policy. What happens to the money supply and interest rates in the money market? A. The money supply increases and interest rates fall. B. The money supply increases and interest rates rise. C. The money supply decreases and interest rates fall. D. The money supply decreases and interest rates rise. QUESTION 16 Suppose the...
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