If a decrease in aggregate demand causes real output to fall below the economy's full-employment output level, the government should take an active role, using monetary and fiscal policy to stimulateaggregate demand and move the economy back to full-employment output. Check all that apply.MonetaristsRET adherentsMainstream economistsSetting policy rules to limit discretionary shifts in monetary policy will lead to steadier economic growth. Check all that apply.O MonetaristsMainstream economistsRET adherentsO OO O O Suppose the government of Country Z collects €3 billion in tax revenues, borrows €2 billion, and plans to spend €7 billion. The government must, therefore, increase the money supply by €billion for the government budget constraint to hold.Which of the following statements regarding the relationship between fiscal and monetary policies is correct?If the central bank raises interest rates, this lowers the cost of government debt, decreasing government expenditures.Government spending that leads to large fiscal deficits can cause interest rates to rise.The effects of fiscal policy and monetary policy are independent of one another.Government spending that leads to large fiscal deficits can cause interest rates to fall.

Fiscal policy is taken by the government of the economy while monetary policy is taken by the…

If a decrease in aggregate demand causes real output to fall below the economy's full-employment output level, the government should take an active role, using monetary and fiscal policy to stimulate aggregate demand and move the economy back to full-employment output. Check all that apply. Monetarists O RET adherents: O Mainstream economists Setting policy rules to limit discretionary shifts in monetary policy will lead to steadier economic growth. Check all that apply. O Monetarists O Mainstream economists O RET adherents

If a decrease in aggregate demand causes real output to fall below the economy's full-employment output level, the government should take an active role, using monetary and fiscal policy to stimulate aggregate demand and move the economy back to full-employment output. Check all that apply. Monetarists O RET adherents: O Mainstream economists Setting policy rules to limit discretionary shifts in monetary policy will lead to steadier economic growth. Check all that apply. O Monetarists O Mainstream economists O RET adherents

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

Explain why monetarypolicymakers can target any inflation ratein the long run butcannot target a levelof aggregate output inthe long run
The Fed is fighting recession and it happens to overstimulate the economy. If the expected inflation rate rises above the 2 percent goal, what is the cost of returning the inflation rate back to its goal? The cost of returning the inflation rate back to its goal is _______. A. an inflationary gap and an even higher inflation rate than initially B. unemployment below the natural unemployment rate C. a decrease in potential GDP and aggregate supply D. a recessionary gap and a higher unemployment rate
Refer to the table below. Real Output Real Output Demanded, Original, Supplied, Billions Price Level Billions $504 108 $515 507 104 512 510 100 510 513 96 507 516 92 500 Suppose that aggregate demand increases such that the amount of real output demanded rises by $11 billion at each price level. Instructions: Enter your answers as a whole number. a. By what percentage will the price level increase? percent Will this inflation be demand-pull inflation, or will it be cost-push inflation? |(Click to select) b. If potential real GDP (that is, full-employment GDP) is $510 billion, what will be the size of the positive GDP gap after the change in aggregate demand? billion c. If government wants to use fiscal policy to counter the resulting inflation without changing tax rates, would it increase government spending or decrease it? |(Click to select) ♥
plz answer correct explain asap Dont answer by pen pepar
What type of macroeconomics presents the view that the market economy works well, that aggregate fluctuations are a natural consequence of an expanding economy, and that government intervention cannot improve the efficiency of the market economy? macroeconomics is the view that the market economy works well, that aggregate fluctuations are a natural consequence of an expanding economy, and that government intervention cannot improve the efficiency of the market economy. O A. Monetarist B. Classical OC. Keynesian O D. Long-run Classical macroeconomics A. is currently championed by Paul Krugman in his weekly column in the New York Times B. had its beginnings with the 1936 publication The General Theory of Employment, Interest, and Money C. explains how the economy performs in the face of a major slump in spending D. fell into disrepute during the Great Depression Click to select your answer. MacBook Air DII DD 000 F11 F12 F7 F8 F9 F10 esc F4 F5 F6 F1 F2 F3 & ! @ # $ 5 7 8 delete 1 2 3 {…
The Fed is fighting recession and it happens to overstimulate the economy. If the expected inflation rate rises above the 2 percent goal, what is the cost of returning the inflation rate back to its goal? The cost of returning the inflation rate back to its goal is _______. A. an inflationary gap and an even higher inflation rate than initially B. unemployment below the natural unemployment rate C. a decrease in potential GDP and aggregate supply D. a recessionary gap and a higher unemployment rate Thanks!
Assuming that all else remains constant, contractionary monetary policy causes aggregate demand to: Select one: a. rise by less than it otherwise would have and the price level to rise by less than it otherwise would have. b. fall by less than it otherwise would have and the price level to rise by less than it otherwise would have. O c. rise by more than it otherwise would have and the price level to rise by less than it otherwise would have. d. fall by more than it otherwise would have and the price level to rise by more than it otherwise would have.
Suppose two countries have identical aggregate demandcurves and potential levels of output, and g is the samein both countries. Assume that in 2019, both countriesare hit with the same negative supply shock. Given thetable of values below for inflation in each country, whatcan you say, if anything, about the credibility of eachcountry’s central bank? Explain your answer.Country A Country B2018 3.0% 3.0%2019 3.8% 5.5%2020 3.5% 5.0%2021 3.2% 4.3%2022 3.0% 3.8%
Consider the strength of monetary forces. The effectiveness of monetary policy in bringing about changes in real GDP is enhanced when the OA. investment demand curve and money demand function are both relatively flat. OB. investment demand curve and money demand function are both relatively steep. C. investment demand curve is relatively steep and the money demand function is relatively flat. OD. investment demand curve is relatively flat and the money demand function is relatively steep. OE. None of the above-monetary policy is always equally effective.
. How does monetary policy affect aggregate demand? a) By influencing consumer spending only b) By influencing investment spending only c) By influencing both consumer and investment spending d) By influencing government spending only -. A central bank uses contractionary monetary policy to: a) Combat deflation
Inflation-rate targeting by an independent central bank O A. feeds inflation expectations. O B. helps price signals work. O C. results in confusing price signals. O D. favours a hands - on emphasis on government discretion.
What kind of monetary policy should the Fed use if the economy is currently in the northwest area of the bullseye chart? O Expansionary. ONeither expansionary nor restrictive O Restrictive O Expansionary and restrictive