Problem Explain whether each of the following statements is true, false, or could go either way, depending on the circumstances. If a question has more than one part,please explain why each part is true, false, or uncertain. a) the Central Bank of Ghana buys bonds through open market operations; such a policy would simultaneously decrease interest rates and increase out put. b) Suppose an economy is running a government budget deficit. Assume that C= C0+C1 (Y-T). A decrease in government spending will cause the deficit to be come small if taxes do not change? Note; C is consumption, Y is GDP, T is tax,C1 Is the marginal propensity to consumeand C0 Is autonomous consumption. c) Following a real depreciation of a country currency, the trade balance of that country improves. d) In an economy with technological progress, the saving rate is irrelevant in the long-run. e) The Monetary policy Committee of the Bank of Ghana after its minJanuary January 2019 deceased the monetary policy rate from 17% to16%. This represents a1% a decrease in them one tar yo policy rate.
Problem
Explain whether each of the following statements is true, false, or could go either way, depending on the circumstances. If a question has more than one part,please explain why each part is true, false, or uncertain.
a) the Central Bank of Ghana buys bonds through open market operations; such a
policy would simultaneously decrease interest rates and increase out put.
b) Suppose an economy is running a government budget deficit. Assume that C= C0+C1 (Y-T). A decrease in government spending will cause the deficit to be come small if taxes do not change? Note; C is consumption, Y is
propensity to consumeand C0 Is autonomous consumption.
c) Following a real
d) In an economy with technological progress, the saving rate is irrelevant in the long-run.
e) The
Step by step
Solved in 3 steps
