Q: Name a couple of “players” in the monetary supply process.
A: The aggregate of all forms of money available in an economy and in circulation within it constitutes…
Q: why should monetary policy be used ?
A: All central banks have three tools of monetary policy in common. First, all of them use open market…
Q: Consider the following quote: "Over one and a half million people were laid off from jobs following…
A: For transportation of goods and materials across the nation, mostly petrochemicals were used. So…
Q: A mission of the Federal Reserve is to promote a combination of low interest rates and low…
A: By the means of monetary policy and fiscal policies, the Federal Reserve and the government can…
Q: Which of the following is true of monetary policy? a. If the Fed wants to increase the money…
A: Monetary policy is controlled and imposed by central bank.
Q: Which of the following is NOT an example of monetary policy A. Lowering the discount rate…
A: Monetary policy is the policy which leads to change in the monetary component (interest rate) in the…
Q: Based on the impact of a drop in the discount rate on the supply of money in the market. select an…
A: Money supply: It is the total stock of money in circulation at a point in time and the money supply…
Q: Which of the following is NOT part of monetary policy? * a. influencing the demand for goods and…
A: Monetary policy is operated by the central bank of a country. Monetary policy affects the money…
Q: Explain why a sudden, large burst of inflation could lead to a recession?
A: Inflation is the continuous rise in the price level of commodities in a nation over a period of…
Q: Select economic problem occuring from an increase in the money supply and explain what happens.
A: Money:Money refers to anything which can be accepted in exchange of commodity or in repayment of…
Q: What are the Fed’s three objectives in conductingmonetary policy?
A: The Federal Reserve, as the country's monetary policy authority, affects the cost and availability…
Q: Which of the following is the result of more M1 in the economy? A. rising prices due to more money…
A: In an economy, M1 money supply is the total money available with the household and liquid money held…
Q: Why did Friedman and the Monetarists believe that monetary misuse accompanied every severe recession…
A: Inflation means the rise in the price level of goods and services in an economy. It means as the…
Q: Which of the following individuals is NOT associated with the school of Modern Monetary Theory?…
A: Modern Monetary Theory or Modern Money Theory (MMT) is a heterodox macroeconomic theory that depicts…
Q: what do you understand by monetary targeting ? what are the condition for a good targets?
A: The economies around the world tend to work upon the basis of various economic entities, such as the…
Q: The monetary policy video showed that the "monetarists" are opposed to using monetary policy as a…
A: An economic theory that focuses on the effects of the macroeconomic factors of the supply of money…
Q: Which of the following is a tool of the Federal Reserve’s monetary policy? Group of answer…
A: The policy through which the central bank of the nation takes action for influencing the amount of…
Q: Why does the Federal Reserve (FED) raise the discount rate when the economy is strong?
A: Discount rate means interest rate.Raising or lowering nterest rate is part of the federal monetary…
Q: the Federal Reserve raises the discount rate, the Federal Reserve is enacting
A: Discount rate is the interest rate charged by the central bank for the loans provided by it to the…
Q: describe the actions the Federal Reserve took to maintain a healthy economy during the recent…
A: Fed has done so much to prevent the economy from slowing down during the economic crises as an…
Q: In which situation does the value of money increase? if either money demand or money supply…
A: if the money supply decrease or the money demand level decrease the price level will fall , this…
Q: How monetary works in a period of recession?
A: Monetary policy is used by the government or a central bank of the country to change the economy's…
Q: Which of the following is an example of representative money? Group of answer choices Gold…
A: Representative money is money created by the government and backed by a physical asset such as…
Q: In response to the Covid-19 pandemic, the U.S. Federal Reserve has lowered the target federal funds…
A: There are different policies that are used by the government to attain the desired shifts in the…
Q: When the demand for money is greater than the supply of money: A) people offering to…
A: Money demand is the demand for cash balances by the individuals in the economy.Money supply is the…
Q: The buying power of a dollar increases when more money is available?? True or false
A: Buying power is also known as Purchasing power Purchasing power refers to the number of goods and…
Q: In the late 3rd century AD, Diocletian rose to assume the throne of the Roman Empire. At the time,…
A: Price Ceiling refers to the maximum price that the suppliers or sellers are allowed to charge the…
Q: Question 8 Which of the following are true about fiscal and monetary policy? There may be more than…
A: Fiscal policy and monetary policy are tools that enable government & central bank to manage the…
Q: the money supply is $60 and nominal GDP is $360, then Group of answer choices A) the velocity of…
A: Nominal GDP is the market value of goods and services produced within an economy using current…
Q: Assume the economy is characterized by rational expectations. If the Federal Reserve seeks to…
A: Considering the rational expectations of the consumers in the economy, when the federal reserve try…
Q: Please answer ASAP this is a very short question Before the Civil War, _____, not the U.S.…
A: Before the Civil War US government did not print money.
Q: According to Keynesian economists, if people in the economy are not spending enough then the…
A: Keynesian the served the deserving value to the demand side of the economy when it comes influencing…
Q: Describe how the Federal Reserve can use its authority to stimulate the economy. How does the Fed…
A: 1. The Federal Reserve's two legal duties in the United States are to establish a consistent and…
Q: What are the goals of monetary policy? What are the monetary policy targets? Which target is…
A: What are the goals of monetary policy? The objectives of monetary policy are to advance most extreme…
Q: At the time of the writing of the chapter titled, "The Federal Reserve," in the Naked Economics book…
A: Finally! Another release of the economic matters book that will not take care of you. In our…
Q: Federal Reserve ended all measures designed to change interest rates and instead allowed rates to be…
A: The federal reserve is a central banking system. It provides all services of the banking and…
Q: Which of the statements best describes the monetary rule, as proposed by the economist Milton…
A: According to Nobel-prize winning economist Milton Friedman, the economy needed to increase its money…
Q: Assuming all else equal, the following happens in the economy. “Wages have grown more slowly than…
A: Rise in labor costs means increase in cost of production. As costs of production increase, in short…
Q: According to the principle of monetary neutrality, which variables are affected by changes in the…
A: Nominal variables refer to variables that are measured in monetary units, whereas, real variables…
Q: Explain monetary neutrality as a concept of monetary economics.
A: Money neutrality is a concept of monetary economics for which an increase in the supply of money…
Q: A student who cashes a check at the student union in order to go shopping illustrates an example of…
A: In financial hypothesis, explicitly Keynesian financial aspects, speculative demand is one of the…
Q: What is monetary policy, and who is responsible for creating it?
A: Monetary policies are policies that are implemented to control the economy by a country's central…
There was a temporary increase in the price of oil. Why does an increase in price of oil pose a dilemma for the monetary authority (Fed)?
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- During the early months of the pandemic, the inflation rate fell well below the 2% target which would have alerted the Federal Reserve Bank to take action. Why was that the case? Did the Fed have anything to do with that process?Why can’t the Fed target both the money supply and the interest rate at the same time?During times of rising inflation, the Fed will undertake monetary policy or "tight money policy."
- Predict how possible changes in monetary and/or fiscal policy may impact the supply and demand of the iPhone.A mission of the Federal Reserve is to promote a combination of low interest rates and low unemployment. Why can it be difficult to accomplish both of these at the same time?What is monetary theory?
- The United States Federal Reserve has two mandates when setting monetary policy - keep annual inflation low (around 2-3%) and the unemployment rate low (around 5%). Typically, efforts to adjust the money supply to cause inflation to decrease causes unemployment to increase and vice versa. Now, imagine a situation where the United States faces high inflation and high unemployment (called stagflation, was issue in late 1970s). What do you think the Federal Reserve should do in this situation?A problem that the Fed faces when it attempts to control the money supply is that the Fed can only control excess reserves but not total reserves. the Fed has to get the approval of the U.S. Treasury Department whenever it uses any of its monetary policy tools. the Fed does not have a tool that it can use to change the money supply by either a small amount or a large amount. the Fed does not control the amount of money that households choose to hold as deposits in banks.The Federal Reserve does not target both the money supply and an interest rate because it would be too confusing to Wall Street and would disrupt the financial markets. it would be too easy for Wall Street to determine what policy the Fed is following and this would destabilize the economy. it would be illegal according to the Federal Reserve Act. the Fed cannot achieve a target for both the money supply and an interest rate at the same time.