Please give every part answer and take like Economics: Which of the following policies is consistent with Keynesian economics during an economic downturn? A)Austerity measures to reduce government debt B) Tax cuts for high-income individuals C) Increased governmentspending on infrastructure projects D) Deregulation of financial markets 6. According to Keynesian economics, what isthe role of monetary policy in managing the economy? A) Increase interest rates during recessions B) Decrease mon

5. C) Increased government spending on infrastructure projectsKeynesian economics argues that…

Answered: Economics: Which of the following…

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter36: Six Debates Over Macroeconomic Policy

Section: Chapter Questions

Problem 4PA

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Question 4Suppose a country’s inflation level is higher than desired, and unemployment levels arelower than expected – the central bank decides that the economy is ‘overheated’ andattempts to use the appropriate monetary policy to deal with the situation. Describe,with the help of the appropriate figure, how a central bank might go about implementingsuch monetary policy, the subsequent effects this has on interest rates, the quantity ofmoney in the market, and the process through which this affects the level of expenditurein the economy.
What is the main argument for having a Central Bank independent from the government for the purposes of monetary policy? Select one: a. An independent Central Bank would have more resources available to devote towards implementing monetary policy b. An independent Central Bank would be more knowledgeable about the state of the economy. Consequently, the Central Bank would be better suited to implementing monetary policy c. The Central Bank is more credible in its inflation and cash rate targets. Consequently, inflation expectations will adjust appropriately to monetary policy announcements d. Having an independent Central Bank prevents any economic trade-offs when making monetary policy choices
Question 6 If the economy were represented by the following graph, what is the appropriate monetary policy? Price Level LRAS SRAS El P1 AD Real GDP Y1 Yp buy government bonds from commercial banks, thereby lowering interest rates and increasing aggregate demand. Ob sell government bonds to commercial banks, thereby lowering interest rates and increasing aggregate demand buy government bonds from commercial banks, thereby increasing interest rates and decreasing aggregate demand O d) sell government bonds to commerical banks, thereby increasing interest rates and decreasing aggregate demand.
1. Which of the following is concerned with changing the aggregate demand of thenation?A) External balanceB) Internal balanceC) Expenditure-changing policiesD) Expenditure-switching policiesAnswer: 2. Which of the following is an example of an expansionary monetary policy?A) Increase in TaxesB) Increase in the nation's money supplyC)Increased government expendituresD) Reduction in taxesAnswer:
Which of the following is true of monetary policy? a. If the Fed wants to increase the money supply, it should increase the interest rate it pays banks on their reserves. b. The long and variable lags between a shift in monetary policy and when the policy shift affects output and employment makes it easier for the Fed to time monetary policy properly. c. A monetary policy that maintains price stability provides the foundation for both economic stability and the smooth operation of a market economy. d. The Fed should try to push real interest rates to the lowest possible level in order to stimulate investment and aggregate demand.
6
3. If the economy is at the natural rate of unemployment with the level of real GDP at potential output, what would expansionary fiscal or monetary policy do to the economy? How would the economy be affected in the short run and long run?
1a. What is the proper objective function for monetary policy? b. How transparent should the central bank be? c. Should a central bank adopt formal inflation targeting? d. Should monetary policy be made by an individual or a committee? e. Should central banks also be bank supervisors?
What is a key distinction between monetary policy and fiscal policy in economic management?A. Monetary policy involves government spending and taxation, while fiscal policy focuses on interestrates and money supply.B. Monetary policy is set by the central bank, while fiscal policy is determined by the government'sbudget decisions.C. Monetary policy primarily influences employment and economic growth, while fiscal policy mainlyaffects inflation.D. Monetary policy is a short-term strategy, while fiscal policy is a long-term approach to economicmanagement.
4. Why did inflation targets replace monetary targets as the most widely used strategy for monetary policy in advanced economies?
Despite ongoing debates about the appropriateness of macroeconomic policies, many macroeconomists have reached a modern consensus on several important issues. Which of the following statements regarding monetary policy are true according to the macroeconomic consensus in the United States? Check all that apply. O Congress, not the Federal Reserve, should be in charge of monetary policy. O Monetary policy should focus on price stability. O Expansionary monetary policies should be used to keep unemployment below its natural rate.
This is multiple choice question, Pls solve it quickly !!

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