Bundle: Principles of Economics, Loose-leaf Version, 8th + LMS Integrated MindTap Economics, 2 terms (12 months) Printed Access Card
8th Edition
ISBN: 9781337607735
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 30, Problem 2PA
Subpart (a):
To determine
Value of money and price level.
Subpart (b):
To determine
Value of money and price level.
Subpart (c):
To determine
Value of money and price level.
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Suppose that changes in bank regulations expand the availability of credit cards so that people need to hold less cash.
a. How does this event affect the demand for money?
b. If the Fed does not respond to this event, what will happen to the price level?
c. If the Fed wants to keep the price level stable, what should it do?
(Please show me the graphs. Explanations do not need to be specific.)
Economics
Suppose that a large bank borrowed $1 billion
from the Federal Reserve for one week. How
would this change the monetary base? If the
Federal Reserve did not want the monetary base
to change, what would it do? Explain your
reasoning.
If the Fed unexpectedly shifts to a more restrictive monetary policy, which of the following will most likely occur in the short run?
a. An increase in inflation
b. An increase in real GDP
c. An increase in unemployment
Chapter 30 Solutions
Bundle: Principles of Economics, Loose-leaf Version, 8th + LMS Integrated MindTap Economics, 2 terms (12 months) Printed Access Card
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