Expansionary monetary policy is when: None of the statements are correct. The president and congress agree to lower interest rates. The president orders the Federal Reserve to cut income taxes. The Federal Reserve reduces the regulations hindering our business community. The Federal Reserve increases the nation's money and credit supply and raises interes

Expansionary monetary policy is when: None of the statements are correct. The president and congress agree to lower interest rates. The president orders the Federal Reserve to cut income taxes. The Federal Reserve reduces the regulations hindering our business community. The Federal Reserve increases the nation's money and credit supply and raises interes

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Which one of the following statements is the MOST accurate? A temporary increase in a country's money supply causes a proportional long- run depreciation of its currency against foreign currencies. A permanent increase in a country's money supply causes a proportional long- run appreciation of its currency against foreign currencies. A permanent increase in a country's money supply causes a proportional short- run appreciation of its currency against foreign currencies. A permanent increase in a country's money supply causes a proportional long- run depreciation of its currency against foreign currencies. A permanent increase in a country's money supply causes a proportional short- run depreciation of its currency against foreign currencies.
Monetary policy actions are determined by the Federal Open Market Committee. Committee of commercial bank presidents. President of the United States. OU.S. Congress.
What are the goals of monetary policy? maximum employment and stable prices zero unemployment and zero inflation zero unemployment and stable prices maximum employment and zero inflation The Federal Reserve seeks to achieve these goals by choosing between maximum employment and stable prices in the long run. maintaining both the money supply and short-term interest rates at low levels. keeping the growth rate of money consistent with the growth rate of the natural rate of output. targeting short-term interest rates and the money supply.
If the central bank sells government securities from the private sector-money markets,other things being equal, what would the effect be on the following?The economy’s monetary base, Short-term money market interest rates, Investment, Aggregate demand, Aggregate supply, economic activity, Inflation, Unemployment
Using the aggregate demand and supply model shows how a government can manage aggregate demand. Faced with the possibility of recession explain how monetary policy may be used to rectify the position. How effective is such a policy likely to be?
In general, when there is less competition in the banking sector ( a lower supply of firms), nominal interests rates decrease, which makes it easier for business owners to obtain a loan. inflation decreases, which is better for the economy as a whole. nominal interest rates increase, which is good for businesses. nominal interest rates increase, making it more difficult for business owners to obtain loans, which is bad for the economy as a whole.
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
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.
The purpose of expansionary monetary policy intervention by the Federal Reserve is Question 17 options: to stimulate the economy to achieve economic growth to lower unemployment. to stimulate the economy to lower the budget and trade deficits. to slow down the economy to eliminate inflation and increase the government's tax revenue. to slow down the economy to achieve lower inflation and prick the asset bubble.
24. A flat reduction of $ 2,500,000 in income taxes will increase disposable income by exactly $ 2,500,000. True or false 30. Congress plays an important role in monetary policy decision-making. The main role of the president is limited to appointing the members and the president of the Board of Governors. True or false 31. A common market is a group of countries that have little or no trade restrictions between them. True or false
Expansionary monetary policy: Question 17 options: decreases the interest rate and increases the price level. increases the interest rate and decreases the price level. decreases the interest rate and decreases the price level. increases the interest rate and increases the price level.