Which of the following was not proposed as an explanation of why the effectiveness monetary policy was limited during and after the financial crisis of 2007-2009? A) recessions accompanied by financial crises tend to be severe. B) long levels of high unemployment had led to a reduction in the employment to population ratio that would be difficult to reverse. C) the Fed was reluctant to implement nonconventional policies. D) structural changes had taken because important sectors of the economy were deeply affected by the financial crisis. recessions accompanied by financial crises tend to be severe long levels of high unemployment had led to a reduction in the employment to population ratio that would be difficult to reverse. structural changes had occurred because important sectors of the economy were deeply affected by the financial crisis. the Fed was reluctant to implement nonconventional policies.

Which of the following was not proposed as an explanation of why the effectiveness monetary policy was limited during and after the financial crisis of 2007-2009? A) recessions accompanied by financial crises tend to be severe. B) long levels of high unemployment had led to a reduction in the employment to population ratio that would be difficult to reverse. C) the Fed was reluctant to implement nonconventional policies. D) structural changes had taken because important sectors of the economy were deeply affected by the financial crisis. recessions accompanied by financial crises tend to be severe long levels of high unemployment had led to a reduction in the employment to population ratio that would be difficult to reverse. structural changes had occurred because important sectors of the economy were deeply affected by the financial crisis. the Fed was reluctant to implement nonconventional policies.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Provide brief intuitive answers to the following questions. 1. What are the main empirical and theoretical contributions of the Mankiw, Romer and Weil's paper? Define one of the main empirical challenges they faced in their analysis? 2. Explain what central banks can do when they encounter a liquidity trap, and cannot use conventional monetary policy. 3. Explain how the real business cycle model can explain why the price level is countercyclical at some times, and uncorrelated with output at other times.
X 8. Using policy to stabilize the economy The government has the ability to influence the level of output in the short run using monetary and fiscal policy. There is some disagreement as to whether the government should attempt to stabilize the economy. Which of the following are arguments in favor of active stabilization policy by the government? Check all that apply. The Fed can effectively respond to excessive pessimism by expanding the money supply and lowering interest rates. Businesses make investment plans many months in advance. Changes in government purchases and taxation must be passed by both houses of Congress and signed by the president. The current tax system acts as an automatic stabilizer. Which of the following are examples of automatic stabilizers? Check all that apply. Unemployment insurance benefits Corporate income taxes The discount rate C O 1:24 PM 4/29/2022
Current U.S. monetary policy is best described as: Aimed at keeping inflation low and stable and growth high and stable Determining the denominations of a country's currency One of the most important functions of Congress Attempting to keep inflation constant at zero percent
Suppose the economy has just entered a downturn due to a decrease in investment spending. While of the following actions could a central bank take to successfully counteract the downturn? a) Increase capital investment spending on the part of government agencies. b) Issue treasury bills in order to lower the interest rate. c) Buy back treasury bills in order to lower the interest rate. d) Buy back treasury bills in order to raise the interest rate. e) Lower the tax rate on real estate and capital gains assets
Assume the U.S. economy is already operating above the full-employment level of GDP (i.e., above 2.5%). If the Trump tax cuts put additional upward pressure on GDP growth and inflation, fiscal policy should further increase government expenditures monetary policy should be raising interest rates monetary policy should do nothing monetary policy should decrease the growth rate of the money supply
If the U.S. economy enters a new financial crisis, the government may use monetary policy tools to avert a financial meltdown. The government may utilize monetary policy tools to avert a financial collapse if the U.S. economy experiences another financial crisis. First, the Federal Reserve should operate as a lender of last resort and make loans to banks and financial institutions to meet their short-term obligations. When the risk of a financial collapse has receded, the government should revert to its traditional expansionary monetary policy. Open market activities of buying and selling assets on the open market is one action the government may use. Through open market operations, the government may increase the economy's liquidity by purchasing assets from banks and the general public. Reducing the discount rate, i.e. the interest rate at which the central bank provides short-term loans to banks, will result in a decrease in the rate at which commercial banks offer loans to the…
The equilibrium output level in the country of Plutonia is $44 billion, while its potential output is $74 billion. Suppose the central bank of the country implements an expansionary monetary policy. Which of the following is likely to occur? a) An increase in interest rates will stimulate investment, shifting the aggregate demand curve to the right. b) A reduciton in interest rates will lower investment, shifting the aggregate demand curve to the left. c) An increase in interest rates will lower investment, shifting the aggregate demand curve to the left. d) An reduction in interest rates will stimulate investment, shifting the aggregate demand curve to the right.
An example of monetary policy is an increase in_____by the_____, which_____aggregate demand. 1) taxes; President; increases 2) the quantity of money; Central Bank; decreases 3) the quantity of money; Central Bank; increases 4) the quantity of money; government; increases 5) federal spending; Central Bank; increases
Higher unemployment rates for those 25 years old and younger in many European nations, in comparison to the United States, is best explained by the differing monetary policies between the European Central Bank and the Federal Reserve. True False