A primary goal of the Federal Government is to regulate the economy through control over the money supply. True orfalse

The statement is true. One of the primary goals of the Federal Government, specifically the Federal…

Answered: A primary goal of the Federal…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose that the Bank of Canada determines that the Canadian economy is currently overproducing. What can the Central Bank do to slow down economic activity? a. The Central bank can pursue an expansionary monetary policy by increasing the money supply, causing a decrease in the interest rate. As a result, real GDP will increase and the price level will increase. b. The Central bank can pursue a contractionary monetary policy by decreasing the money supply, causing a decrease in the interest rate. As a result, real GDP will decrease and the price level will decrease c. The Central bank can pursue a contractionary monetary policy by decreasing the money supply, causing an increase in the interest rate. As a result, real GDP will decrease and the price level will decrease. d. The Central bank can pursue a contractionary monetary policy by decreasing the money supply, causing an increase in the interest rate. As a result, real GDP will decrease and the price level will increase e. The…
Question 8 Which of the following are true about fiscal and monetary policy? There may be more than one answer. a) A change in tax policies can affect output in the long-run. b) A change in government purchases can affect output in the short-run. c) Since money supply can only affect prices, it can never affect output in the long-run. d) Since money supply can only affect prices, it can never affect output in the short-run.
The monetary policy has two basic goals: to promote “maximum” sustainable output and employment and to promote “stable” prices (Federal Reserve Bank of San Franciso). Making these two goals possible is based off of more than just monetary. Technology is now included because technology can replace employment. If people decide to save, it can affect both employment and the goods that can be reduced. There are many other things that can affect the maximizing of sustainable output. The cause-effect chain through is that policy can have an effect on banks and money supply. The monetary policy also has an effect the way consumers spending and the interest rates that are given by banks. It can also affect the way people invest. The major strengths of monetary policy is that it stable prices. When inflation rises faster than expected, the Fed may sell government bonds to take money out of circulation or raise short-term interest rates (Federal Reserve Bank of San…
The interest rate is the opportunity cost of holding money. Select one: True False
The U.S. fiduciary monetary system :puts capital controls in place .is one where money is not convertible to a fixed quantity of gold .controls the private banking system .is the one agency responsible for providing coins and paper currency.
Both increases in the price level and increases in real GDP will decrease the demand for money True False
A policy that results in slow and steady growth of the money supply is an example of A-an “easy” monetary policy. B-a “passive” monetary policy. C-a “practical” monetary policy. D-an “active” monetary policy.
Printing money to finance government expenditures is the principal method by which the U.S. government finances its expenditures imposes a "tax" on everyone who holds money causes the value of money to rise prevents the government from having to tax its citizens is a smart way to run a country
In modern developed economies, central banks (like the U.S. Federal Reserve System) perform at least two major tasks; they: Select one: a. conduct fiscal policy and serve as financial intermediaries. b. control the money supply and collect tax revenues. c. conduct fiscal policy and serve as lenders of last resort. d. control the money supply and regulate banks.
Describe the Fiscal Policy and the monetary policy and explain how The two policies are used to control money supply in the economy.
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A primary goal of the Federal Government is to regulate the economy through control over the money supply. True or false