Which statement is true? O Austrians believe that financial markets are always efficient and that no central bank intervention will caus a distortion (S=1). O Monetarists, Real Business Cycle Theorists, and Austrian Business Cycle Theorists all believe that business cycles are a result of bad monetary policy. O Monetarists believe that financial markets are efficient (S=1), whereas Keynesians belie financial markets are prone to failure (S 1). O Monetarists believe that financial markets are prone to failure (S#1), whereas Keynesians believe financial markets are efficient (S=1).

Which statement is true? O Austrians believe that financial markets are always efficient and that no central bank intervention will caus a distortion (S=1). O Monetarists, Real Business Cycle Theorists, and Austrian Business Cycle Theorists all believe that business cycles are a result of bad monetary policy. O Monetarists believe that financial markets are efficient (S=1), whereas Keynesians belie financial markets are prone to failure (S 1). O Monetarists believe that financial markets are prone to failure (S#1), whereas Keynesians believe financial markets are efficient (S=1).

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 short run, if the Federal Reserve adds liquidity to the economy, then... O A. the real interest rate decreases. OB. the risk-free rate decreases. O C. both A. and B. O D. neither A. nor B.
Please answer fast
4 EVERYTHING IS CORRECT EXCEPT FOR THE TARGET RATE AND I HAVE TIRED 10 DIFFRENT ANSWERS PLEASE HELP!!!!!
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 spending
When governments use monetary policies to make sure most citizens can find jobs, they are pursuing the policy goal of: O A. reducing the overall money supply. OB. maximizing sustainable employment. C. keeping interest rates moderate. OD. promoting stable prices.
Please no written by hand solutions Which of the followingfollofollowingf
Which of the following statements is true for the scenario illustrated in the below diagram? LRAS Price Level (base year = 100) 120 110 100 90 80 400 SRAS E₁ 700 Eo AD AD₁ 500 600 Real Output (constant dollars) 800 O it illustrates a recessionary gap at Eo Oit illustrates expansionary monetary policy by shifting ADO to AD1 O it illustrates procyclical monetary policy O it can be caused by a tightening of the money supply, also known as contractionary monetary policy
Using the simple monetary rule Rt-r=m(T-), if m=0.5 and the inflation rate is 2 percent below the target inflation rate, the Federal Reserve will A. raise the marginal product of capital by 1 percent. B. lower the interest rate by 1 percent. O C. raise the interest rate by 1 percent. OD. lower the marginal product of capital by 1 percent. O E. lower the target rate by 2 percent.
During 2001-2004, the Fed injected additional reserves into the banking system, which reduced the federal funds rate and other short-term interest rates. Other things constant, what is the most likely short-run impact of this policy? an increase in the rate of unemployment O a reduction in the growth of employment an increase in aggregate demand and real GDP O a reduction in the long-run rate of inflation
Over the last two years, the unemployment rate in Westerlight has risen from 4% to 8%, while GDP growth has been 1.5%. Milo, a citizen of Westerlight, currently doesn’t have a job and although he is actively searching, has been unable to find one.The Federal Reserve notices this change in the economy and decide to take steps to correct it. They can use their 4 tools in the following ways:a. What will the Federal Reserve do to open market operations? b. What will the Federal Reserve do to the reserve requirement? c. What will the Federal Reserve do to the discount rate? d. What will the Federal Reserve do to the interest on reserves? e. What impact will this have on loans from banks?
Think of the AD-AS model with an upward-sloping AS curve. Suppose the economy is initially at its long-run equilibrium. What is the impact of an unexpected increase in money supply in the short run and in the long run? O a. In the short run, output rises above its natural level. In the long run, output returns to its natural level and the price level is higher than what it was initially. O b. In the short run, output falls below its natural level. In the long run, output returns to its natural level and the price level is higher than what it was initially. O c. In the short run, output rises above its natural level. In the long run, output returns to its natural level and the price level is lower than what it was initially. O d. In the short run, output falls below its natural level. In the long run, output returns to its natural level and the price level is lower than what it was initially.
Discuss, how Keynesians' view is different from Monetarists' view on the Output- Inflation trade-off? Also, highlight, which school is in favor of the natural rate hypothesis?