If the central bank wants to discourage the government from deficit spending, what options are open...
If the central bank wants to discourage the government from deficit spending, what options are open it? What are the side effects of such option?
Homework Answers
If federal bank wants to discourage government from deficit spending they can directly purchase the securities that the government is using to finance the deficits.
The side effect of this option is that it will close all the options for the government to have fund to finance any kind of of policy even if it is a necessity.
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If the central bank wants to discourage the government from deficit spending, what options are open...
If the government finances its spending by selling bonds to the central bank, the monetary base...
If the government finances its spending by selling bonds to the central bank, the monetary base will ________ and the money supply will ________. 1)increase; increase 2)increase; decrease 3)decrease; decrease 4)not change; not change can you please explain why the answer is A?
a.Assume that the United States begins deficit spending to fund new social welfare programs. b.Using a...
a.Assume that the United States begins deficit spending to fund new social welfare programs. b.Using a correctly labeled loanable funds graph, show and explain the impact of the new spending on real interest rates in the United States. i.Explain the impact of the change in interest rates you identified in part (A) on each of the following: ii.Capital investment iii.Long-term economic growth The international value of the U.S. dollar 2. a.Assume a visitor from another nation decides to open a...
1. Government spending required by laws other than appropriation acts is also known as what? a....
1. Government spending required by laws other than appropriation acts is also known as what? a. Budget spending b. Mandatory spending c. Discretionary spending d. Deficit spending 2. Which of the following statements is true? a. Mandatory spending is determined by law and discretionary spending is determined by appropriation acts. b. Discretionary spending is determined by the president with advice from Congress, and mandatory spending is determined by the Supreme Court. c. Neither mandatory nor discretionary spending can be changed....
1. GDP - annual debt 2. government spending - tax revenue >0 3.government spending - tax...
1. GDP - annual debt
2. government spending - tax revenue >0
3.government spending - tax revenue <0
4. annual debt/GDP
5 annual deficit/GDP
6. total debt - debt held by us households and institutions
==================================================
A budget deficit is government spending in excess of what?
A.. tax revenues
B. real GDP
C. household spending
D. consumption
================================================
What would happen to the cyclical deficit if the GDP growth rate
jumped from 2 percent to 4 percent?
A.decrease in deficit...
Suppose you run the central bank in an open economy. What happens to the following variables...
Suppose you run the central bank in an open economy. What happens to the following variables of interest in response to the below events (analyze each event separately)? The president restricts the import of Chinese goods Use the standard open economy IS-LM model (not the Fleming-Mundell model). Also, assume direct effects of shifts are larger than indirect effects. a) IS – Direct Effect (increase / decrease / indeterminate / no change)? b) IS – Exchange Rate Effect (increase / decrease...
Suppose you run the central bank in an open economy. What happens to the following variables...
Suppose you run the central bank in an open economy. What happens to the following variables of interest in response to the below events (analyze each event separately)? The president restricts the import of Chinese goods Use the standard open economy IS-LM model (not the Fleming-Mundell model). Also, assume direct effects of shifts are larger than indirect effects. a) IS – Direct Effect (increase / decrease / indeterminate / no change)? b) IS – Exchange Rate Effect (increase / decrease...
1. When the government increases spending by issuing more bonds, it causes: a) nations currency to...
1. When the government increases spending by issuing more bonds, it causes: a) nations currency to appreciate b)exports increase c)interest rates decrease d)demand for loanable funds decrease e)decreases merchandise trade deficit 2. When the Fed decreases money supply to combat inflation, it cuases: a)the price of the U.S. dollar to decrease b) capital to flow out of the US c)an increase in the merchandise trade deficit d)an increase in private spending e) a decrease in the interest rates 3. Which...
he government in a small open economy is concerned that the current account deficit is too...
he government in a small open economy is concerned that the current account deficit is too high. One group of economic advisers to the government argues that high government deficits cause the current account deficit to be high and that the way to reduce the current account deficit is to increase lump sum taxes. A second group of economic advisers argues that the high current account deficit is caused by high domestic investment and proposes that domestic investment should be...
Suppose the Central Bank of Kuwait purchases a Kuwaiti government bond from you for KWD10,000. What...
Suppose the Central Bank of Kuwait purchases a Kuwaiti government bond from you for KWD10,000. What is the name of the Bank's action? n the financial crisis central banks will: a. Tighten monetary policy b. Let banks fail c. Raise interest rates d. Loosen monetary policy
The government of Neverland has a budget deficit of $5 bln in year 2389. Which of...
The government of Neverland has a budget deficit of $5 bln in year 2389. Which of the following actions will not cover the deficit? Issue $5 bln worth of government bonds and ask the central bank to buy them Lower taxes on small businesses in year 2390 Issue government bonds in the amount of $3 bln and receive a loan from the International Monetary Fund in the amount of $2 bln Issue government bonds in the amount of $7 bln
1. GDP - annual debt
2. government spending - tax revenue >0
3.government spending - tax revenue <0
4. annual debt/GDP
5 annual deficit/GDP
6. total debt - debt held by us households and institutions
==================================================
A budget deficit is government spending in excess of what?
A.. tax revenues
B. real GDP
C. household spending
D. consumption
================================================
What would happen to the cyclical deficit if the GDP growth rate
jumped from 2 percent to 4 percent?
A.decrease in deficit...
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