(Analysis) Article 3 states that the Unemployment Rate was 3.7% in October. If the Natural Rate of Unemployment is 5%,what type of policy should the Federal Reserve use in order to bring the economy back to Long Run Equilibrium in theAD-AS model?Open market sales which will increase the interest rate.Open market purchases which will decrease the interest rate.Open market purchases which will increase the interest rate.Open market sales which will decrease the interest rate.

If the unemployment rate > the natural rate of unemployment, then the actual GDP is lower than…

what type of policy should the Federal Reserve use in order to bring the economy back to Long Run Equilibrium in the D-AS model? Open market sales which will increase the interest rate. Open market purchases which will decrease the interest rate. O Open market purchases which will increase the interest rate. O Open market sales which will decrease the interest rate.

what type of policy should the Federal Reserve use in order to bring the economy back to Long Run Equilibrium in the D-AS model? Open market sales which will increase the interest rate. Open market purchases which will decrease the interest rate. O Open market purchases which will increase the interest rate. O Open market sales which will decrease the interest rate.

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

In the real sector, the following data are available:Consumption Function C = 100 + 0.75YInvestment function I = 60 - 200r Meanwhile, the Monetary sector provides the following data:The amount of money in circulation = 500Money demand function for Transactions and just in case L1 = 0.2YMoney demand function for Speculation L2 = 428 - 400r Question: a. Determine the interest rate at the time of the General Equilibrium, and what is the equilibrium national income b.Prove that the General Equilibrium really exists! c. The general equilibrium conditions mentioned above can be expressed in a graph
If the target rate of interest is lower than the equilibrium interest rate, the Federal Reserve will Treasury bills in the open market, the supply of money, and the interest rate to the target rate. O sell; increase; lower sell; decrease; raise O buy; decrease; raise O buy: increase; lower
Suppose the Fed wants to increase the money supply. Which open market operation will achieve this goal? Buy government bonds from the private sector. Sell government bonds from the private sector. Increase the fed funds rate. O Lower the fed funds rate. O Increase unemployment benefits.
Q15
If the Federal Reserve decided to increase interest rates, it could O a. buy bonds to raise the money supply. Ob. sell bonds to lower the money supply. Oc. buy bonds to lower the money supply. Od. sell bonds to raise the money supply.
The economy is in a recession. The Fed could take direct action to stimulate economic activity by O lowering short-term interest rates O increasing long-term interest rates increasing short-term interest rates O lowering long-term interest rates
3. If the FED can only directly control nominal interest rates, how does the FED influence real interest rates that determine the actual stance of monetary policy?
Suppose the Federal Reserve decides to raise its long-run target for the rate of inflation. a. How does the Fed need to change its reaction function in order to do this? b. How will this change affect output in the short run?
please als do the graphs. thanksssssssss
You are an economic adviser using the Fed model to analyze the economy. Now suppose that manufacturers in China face rising costs of rubber as an input. What is the effect on the economy? O an unchanged real interest rate, an unchanged output gap, and unexpected inflation a rise in the real interest rate, an unchanged output gap, and unexpected deflation O a rise in the real interest rate, rising output, and unexpected inflation an unchanged real interest rate, falling output, and unexpected inflation
Which of the following best explains why a large increase in the supply of bank reserves can have no effect on the equilibrium effective federal funds rate? The demand for bank reserves becomes perfectly elastic at the interest rate the Fed pays on reserves. The supply curve for bank reserves is upward sloping relative to the federal funds rate, The quantity of reserves demanded by banks is negatively related to the federal funds rate. O The supply of bank reserves become perfectly elastic at the primary discount rate set by the Fed.
If the economy is currently experiencing 10% inflation, which Monetary Policy changes should the Federal Reserve implement (used)? Select all that apply O increase the reserve requirement O lower the reserve requirement O increase the discount rate O lower the discount rate O sell bonds on the open market O buy bonds on the open market O O O O O O