When the Fed implements policy to prevent problems before they happen, it is called policy. O macropecuniary O macroconservative O macroengineered O macroprudential
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Q: Which set of actions could the central bank use to increase the money supply?
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- Please no written by hand solution tle shifts the Central Bank rule to the right. O a. An increase in the Z factors O b. A decrease in the price level O c. An increase in government spending O d. A decrease in government spendingWhich of the following is a policy tool of the Federal Reserve that it actively uses to control the monetary base and conduct monetary policy? All of the other answers are correct. O Open market operations O Setting the reserve requirement O Setting the discount ratecurve to In the market for reserves, if the Federal Reserve Bank increases the required reserve ratio, this should shift the the O supply; left O supply: right O demand; left O demand; right
- Question 52, 13.2 Questio Suppose the central bank in a hypothetical country Corearea uses "core" inflation for inflation targeting purpos K O A. makes inflation targeting harder because it is closely related to excess demand in the economy. O B. is irrelevant for inflation targeting because the central bank does not include the price of food in its targ O C. makes inflation targeting easier because it makes these problems less relevant. OD. is closely related to changes in core inflation, so the central bank uses it for targeting inflation. O E. would be offset by an increase in the Corearian dollar, making this price change irrelevant. Q RechercherQuestion 52, 13.2 Questio Suppose the central bank in a hypothetical country Corearea uses "core" inflation for inflation targeting purpos K O A. makes inflation targeting harder because it is closely related to excess demand in the economy. O B. is irrelevant for inflation targeting because the central bank does not include the price of…Ceteris paribus, if the Fed was targeting the quantity of money supplied and money demand increased, the Fed would likely If the Fed was instead targeting interest rates and money demand increased, the Fed would likely O increase the money supply: decrease the money supply decrease the money supply: do nothing O increase the money supply: do nothing do nothing: increase the money supply do nothing: decrease the money supplyD4
- What are the immediate effects and the long-run effects if the Fed changes the quantity of money? If the Fed changes the quantity of money, the immediate effects are on and the long-run effects are on O A. the short-term nominal interest rate; the price level and the inflation rate B. the price level; the real interest rate and the inflation rate C. the inflation rate; the long-run nominal interest rate and the real interest rate D. the price level; the inflation rateWhich of these statements are true? The discount rate is normally equal to the federal funds rate. The federal funds ratre is normall higher than the discount rate. The Federal Funds rate is the rate that banks are charged when they borrow from the Fed. O The discount rate is normally higher than the federal funds rate.Q18
- In regard to monetary policies, nonactivists have various proposals. True or False: Some nonactivists believe in the Taylor rule, which suggests that the annual money-supply growth rate should be based on the growth rates of velocity and Real GDP to ensure that the price level does not fluctuate. O False O True Which of the following statements best explains the difference between the Taylor rule and the two other nonactivist rules (the constant-money growth rate rule and the predetermined-money growth rate rule)? O The Taylor rule does not take into account the stability of prices. O The Taylor rule suggests how much the money supply should grow. O The Taylor rule does not take into account the current state of the economy. O The Taylor rule is not a derivation of the equation of exchange.a) Which of the follwing monetary policy actions can be used to close an inflationary gap?O No change in the money supply to keep interest rates constant.ODecrease the money supply to decrease interest rates,OIncrease the money supply to increase interest rates.O Increase the money supply to decrease interest rates.O Decrease the money supply to increase interest rates. b) Assume the economy is initially at full-employment equilibrium. Suppose the economy slows down and uncertainty increases, reducing consumption and investment expenditures, in the short run, this shock willcause the economy to fall below full enployment. To move the economy to a full-employment equilibrium, the Fed could:O. decrease government spendingO. increase corporate tax ratesO. lower the federal fund rate targetO. increase government spending O. raise interest ratesSuppose the inflation rate has been 15 percent for the past four years. The unemployment rate is currently at the natural rate of unemployment of 5 percent. 30 The Bank of Canada decides that it wants to permanently reduce the infation rate to 5 percent. To de this, the Bank of Canada would use torg-tun Philips curve 25 poley. the natural 20 As a result of this policy, the unemployment rate will be rate of 6 percent and the inflation rate will be edging slowly 15 Use the line drawing tool to draw the line that ilustrates what will happern the Bank of Canadn maintains this policy long enough that workers and fims lower their expectations of future inflation. Property label this line. 10 Short-un Phiips curve Carefully follow the instructions above, and only draw the required objects. 5- Ir the the Bank of Canada policy is successful, the infation rate will be percent and the unemployment rate will beO percent. 10 Unempioyment rate (percent) Click the graph, choose a tool in the palette…