Homework Answers
Tight monetary policy = For pursuing a tight monetary policy the Fed will increase the discount rate in the market, they will sell bonds in the open market that will increase the Federal fund rate and they will increase the reserve ration in the economy all this will decrease the money supply in the market and increase the interest rate.
For a expansionary monetary policy they will cut the discount rate, buy bonds in the market, reduce the federal fund rate and decrease the reserve ration this will increase the money supply and increase the money supply in the market.
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What actions would the Federal Reserve take if it were pursuing a tight money policy to...
If you were the Federal Reserve chairman, which monetary policy would you advise the federal government...
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...
Compare and contrast the consequences – intended and unintended – of different monetary policy actions of...
Compare and contrast the consequences – intended and unintended – of different monetary policy actions of the Federal Reserve Board to achieve macroeconomic goals of stable prices, low unemployment, and economic growth. What effects can occur with different Federal Reserve actions (such as increasing money supply or raising interest rates)?
In July 2019 the Federal Reserve lowered interest rates for the first time in a decade....
In July 2019 the Federal Reserve lowered interest rates for the first time in a decade. The Federal Reserve has two missions: to keep unemployment low and to keep inflation low. To reduce the unemployment rate, it cuts rates to increase the money supply and increase aggregate demand. To reduce inflation the Fed raises interest rates to decrease the money supply and tamp down aggregate demand. Right now the unemployment rate is at a 50-year low and inflation is below...
What action can the Federal Reserve take to reduce unemployment? Using one of the tools available...
What action can the Federal Reserve take to reduce unemployment? Using one of the tools available to the Federal Reserve, explain how the Fed would accomplish the action you listed. Assume the economy is currently operating at the natural rate of unemployment, what affects will the action you listed in response to have in the short run on output, price level, and interest rates? Please use the AS/AD and Money Market diagrams to illustrate your answer. Again, assume the economy is...
What action can the Federal Reserve take to reduce inflation?
What action can the Federal Reserve take to reduce inflation?
Write the answers to and explain the following: What action can the Federal Reserve take to...
Write the answers to and explain the following: What action can the Federal Reserve take to reduce unemployment? What is the primary tool used by the Federal Reserve to accomplish the action you listed in part (a)? Explain in detail how this tool works. Assuming the economy is currently operating at the natural rate of unemployment, what effect will the action you listed in part (a) have in the short-run on: output price level interest rates Use the AS/AD (Aggregate...
the Federal Reserve Bank has two mandates when setting monetary policy - keep annual inflation around...
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...
Question 16 The Federal Reserve uses a variety of monetary policy tools to achieve which of...
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
On March 15, 2017, Federal Reserve Chairman Janet L. Yellen announced the Federal Reserve was raising...
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...
When would the Federal Reserve engage in contractionary monetary policy? a. never b. when inflation is...
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
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
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...
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