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- 1. Supposeyouhave$200,000inabanktermaccount.Youearn5%interestper annum from this account.You anticipate that the inflation rate will be 4% during the year. However, the actual inflation rate for the year is 6%.Calculate the impact of inflation on the bank term deposit you have and examine the effects of inflation in your city of residence with attention to food and accommodation expenses.2. TheAustralianBureauofStatistics(ABS)reportedinMay2017thatthecivilian population in Australia over 15 years of age was 20.8 million.Of this population of 20.8 million Australians, 13.5 million were employed and 0.7 million were unemployed.Calculate Australia’s labor force and the number of people in the civilian population who were not in the labor force? Also, with examples examine the causes of structural unemployment in Australia.Supposeyouhave$200,000inabanktermaccount.Youearn5%interestper annum from this account. You anticipate that the inflation rate will be 4% during the year. However, the actual inflation rate for the year is 6%. Calculate the impact of inflation on the bank term deposit you have and examine the effects of inflation in your city of residence with attention to food and accommodation expenses.List and explain 3 of the determinants of the demand for money. Foreach, how might they have changed in the last year due to COVID-19 andhow would this affect demand for money?
- If Canadian Tire issues its own "money" and it becomes generally accepted by people in paying for goods and services at other stores, then we would consider it to 84 be ca htt O A. legal money because Canadian Tire is a Canadian incorporated company. O B. a form of fiat money. O C. Mlegal money because the government has not issued it O D. a form of fiduciary money As havWhich of the following will not affect the money market? O a. Money supply O b. Price of one good c. Expansionary monetary policy O d. Contractionary monetary policy1. Suppose that the economy has the following money supply and demand equations: Money Supply: M = 8000Money Demand: M= 10,000 – 40,000rwhere money is in billions of dollars and interest rates, r , is written as a decimal(e.g., an interest rate of 10% would be written as .1 in the equation).A. Determine the equilibrium interest rate and quantity of money.B. What will happen in the money market if the interest rate is currently 10%?What is the amount of excess supply of or excess demand for money?C. Show in graph that at this interest rate (10%) there is disequilibrium in themoney market.
- Recently the economic conditions of the country have been weakened. Even though inflation has not increasedin the last year. Price of crude oil on the international market has increased by 15% last month. As a measurein controlling inflation in the country, the Monetary Policy Committee (MPC) of the Bank of Ghana has decidedto restrict the supply of money and increase the target policy rate by 100 basis points (1%):a. As a finance student, do you support the decision made by the monetary committee? Explain b. Explain how prices of debt securities would change in response to this policy? c. Assume the Monetary Policy Committee decides to reduce the target policy rate by 1.5% today and thisdecision is not backed by any financial market expectations. Will this change in policy directive affectyields paid by firms when they issue corporate bonds? d. In the last month, the 91day treasury bill rate (risk free rate of return) has increased from 10% to 15%per annum. What are the potential…Fiat money has Select one: a. value, because it can be redeemed for gold by the central bank. O b. little to no intrinsic value but is backed by the quantity of gold held by the central bank. C. a great intrinsic value that is independent of its use as money. O d. little to no intrinsic value and is authorized by the central bank or governmental body. Clear my choice FiniQuestion 37 FIGURE 1 MS P2 r2 P1 -MD2 AD MD1 Y, Y REFER TO FIGURE 1. What is measured along the horizontal axis of the left-hand graph? the opportunity cost of holding money the quantity of money O real output O nominal output
- 90 Figure 11-1 of Value of Maney MS1 MS2 lag Meney Dem and 1 C D Quantity of Man ey Refer to the Figure 11-1. What happens when the money supply curve shifts from MS, to MS,? Select one: a. The economy's ability to produce goods and services increases. b. The demand for goods and services decreases. c. The equilibrium value of money increases. d. The equilibrium price level increases. 2.Question 4Suppose a country’s inflation level is higher than desired, and unemployment levels arelower than expected – the central bank decides that the economy is ‘overheated’ andattempts to use the appropriate monetary policy to deal with the situation. Describe,with the help of the appropriate figure, how a central bank might go about implementingsuch monetary policy, the subsequent effects this has on interest rates, the quantity ofmoney in the market, and the process through which this affects the level of expenditurein the economy.In 2019, The Fed was liquidating their balance sheet (meaning they were selling off the bonds and securities purchased in The Great Recession 2007-2009). That means they are trying to do what in regards to the supply of money. O Increase O Decrease O Create a money stream to increase supply of money O Increase their Capital Gains