Answered: To achieve contractionary monetary…

To achieve contractionary monetary policy, the Fed could decrease the discount rate increase the sale of bonds increase the tax rate All of the answers are correct. None of the answers are correct.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter13: Monetary Policy

Section: Chapter Questions

Problem 7E

See similar textbooks

Related questions

Q: How does rule-based monetary policy differ from discretionary monetary policy (that is, monetary…

A: Macroeconomic policy refers to the policy that is involved with the operation of the economy as a…

Q: Disinflation exerts impact on both output and unemployment"

A: Introduction Disinflation means that rising in prices but at a lower rate. During disinflation the…

Q: Show as a diagram and explain the time lags in monetary policy

A: Meaning of Monetary Policy: The term monetary policy refers to the situation under which the money…

Q: The government controls economic policy through the fed, though the fed is independent from the…

A: The economy involves many agents which are the producers and the consumers and the government. There…

Q: If the economy is able to self-correct from a negative GDP gap, why might the Fed wish to intervene…

A: A self-correcting economy refers to one that has the ability to stabilize the market without…

Q: Monetary policy isn't always effective: Why couldn't monetary policy pull us out of the Great…

A: The great depression was the situation when most of the economies in the world were experiencing a…

Q: If a Central Bank decides it needs to decrease both the aggregate demand and the money supply, then…

A: Central bank can able to increase and decrease money supply with the help of various tools like…

Q: what is meant by the phrase “monetary base (MB)?” Which does The Fed have direct control over? The…

A: The money supply includes the total stock of money and deposit in the economy. In other words, it is…

Q: y functions of the FED include: All that Apply) Hint: There are 4 correct answers. uct monetary…

A: United State's central bank and monetary authority is Federal Reserve System or FED The Fed gives…

Q: Select one: a. are generally shorter than monetary policy lags. b. are generally longer than…

A: The government of any economy can either opt for fiscal or monetary policies, to improve economic…

Q: A decrease in Treasury securities held by the Fed leads to an increase in the money supply. (True…

A: The Fed (i.e., Central bank of Unites States) controls the money supply in the US by open market…

Q: stablishin

A: The Federal Reserve System is the United States of America's central system of banking.It was being…

Q: Contractionary monetary policy is aimed at ________ the federal funds rate and ________the aggregate…

A: Adopting a contractionary monetary policy is aimed at decreasing the money in the hands of the…

Q: What are the functions of the Central bank? Explain the nuts and bolts of monetary policy in detail.…

A: The central Bank is the monetary institution that controls the money supply in the economy. The…

Q: What is one of the advantages of monetary policy over fiscal policy? 1) its control over the size of…

A: Monetary policy is implemented by the central bank of a country in which the bank increase or…

Q: Monetary policy isn’t always effective: Why couldn’t monetary policy pull us out of the Great…

A: A recession is an economic condition in which the real growth rate is lower or gross domestic…

Q: Which of the following is true? When income tax rates fall, it is possible for tax revenues to rise.…

A: These Options are Wrong Because 1) Tax rate cuts influence incomes in two ways. Each tax rate slice…

Q: Discuss how the central bank increase the federal funds rate ripples through the different sectors…

A: The economies around the world tend to focus on their growth and development through various…

Q: There was a temporary increase in the price of oil. Why does an increase in price of oil pose a…

A: FED faces a trade-off i.e. dilemma of either lowering the inflation rate or increasing real GDP. FED…

Q: eassy in 250 words. What is the role of the Central Bank? How does central bank regulate monetary…

A: A central bank is a government agency that manages banks, implements monetary policy, and offers…

Q: Which of the following is not one of the three tools used by the fed to implement US monetary…

A: Printing more money is not one of the three tools used by the fed to implement US monetary policies.

Q: What are the results of a contractionary monetary policy, which intends to slow down the economy,…

A: The monetary policy is the policy of the monetary authority of the economy regarding the money…

Q: MUnetary policy- match with appropriate type of monetary policy Increase the rr% Central Banks Sells…

A: Monetary policy can be expansionary and contractionary. Expansionary monetary policy results in…

Q: Why does the Fed manipulate the money supply ? Why might a price "freeze" help monetary policy to…

A: The Fed is the main authority which manipulates the money supply in the economy because it initiates…

Q: newspaper that the Fed has just lowered the discount rate. Does this signal that the Fed is moving…

A: Yes it signals to the adoption of expansioady policy by the central bank. Expansionary policy is…

Q: Explain each of these statements supported by reasonable reasoning: 1. Credibility is important…

A: When product is manufactured, cost takes place along with revenue, which results into profit and…

Q: are open market operations the most important tool that the Fed has to help stabilize the economy?

A: Monetary policy: Monetary policy is the tool in the hands of the central bank of a country which…

Q: Monetary policy actions by the Fed are

Q: Explain the three basic tools of monetary policy that were available prior to the 2007-09 recession

A: Monetary policy is used by central bank to steer the economy. The main idea is to increase or…

Q: In the SARB buys and sells certain financial assets like treasury bills and government bonds in the…

A: Open market operations (OMO) refers to a central bank buying or marketing short-run Treasuries and…

Q: When real GDP is greater than potential output, it is most likely that the Fed will engage in…

A: There are two types of output: 1. Real output/GDP 2. Potential output/GDP

Q: The monetary policy commitee is aided by two departments. State the two departments and any three…

A: Monetary policy is used by Central Bank to stabilize the economy by controlling the money supply.…

Q: The monetary base is the sum of currency in circulation and bank reserves True or False?…

A: The central bank of a nation controls the reserve ratio and interest rates which affect the lending…

Q: Which of the following policies did the Fed follow after 2014? To unwind expansionary policy…

A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: What is the likely outcome if the Fed seeks to maintain a federal funds rate of 0% even when the…

A: The Fed or the central bank of the nation use various monetary tools for the proper functioning of…

Q: The Federal Open Market Committee can buy and sell government securities/bonds. Which of the…

A: The monetary policies are those policies which are enacted by the central bank of a country to…

Q: pick one of the four tools the Fed uses to conduct monetary policy and discuss how it causes a…

A: In an economy, any of the monetary tools can be used to influence the behavior of market…

Q: Which is NOT needed for the Fed to design and implement effective monetary policy to reduce the…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Assume the economy is suffering from massive inflation and you are the Chairperson of the FED. What…

Question

To achieve contractionary monetary policy, the Fed could

decrease the discount rate
increase the sale of bonds
increase the tax rate
All of the answers are correct.
None of the answers are correct.

Definition Definition Policy implemented by the central bank of a country (such as the Federal Reserve in the United States) to achieve certain macroeconomic objectives. Monetary policy is a supply-side macroeconomic policy that supervises the growth rate and money supply in the economy.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

To achieve contractionary monetary policy, the Fed could decrease the discount rate increase the purchase of bonds increase the tax rate All of the answers are correct. None of the answers are correct. Decrease tje IOR and ON RRP rate
Why does the Fed want to avoid an “overheating” economy?
Choose one of the option to be the answer to the phrase. Raising taxes is expansionary fiscal policy contractionary monetary policy contractionary fiscal policy expansionary monetary policy Raising Reserve Requirements is: contractionary fiscal policy expansionary monetary policy contractionary monetary policy expansionary monetary policy
In what ways does the Fed utilize their monetary policy tools to affect or counter-balance fiscal policy?
Why can’t the Fed target both the money supply and the interest rate at the same time?
There is an ongoing discussion on whether US will experience recession or not in 2024. Do you think the Fed will reach its soft landing goal? Why? Explain."
What is the difference between contractionary monetary policy and expansionary monetary policy and what effects does it have on inflation?
What’s the monetary policy? Why the Fed implements the monetary policy?
What is the reason why fiscal policy should be in tune with monetary policy when the economy is in the recession phase? What is the importance of the Central Bank in the financial market?
Explain the relationship between the effectiveness of monetary policy and the interest elasticity of money demand. Will the monetary policy be more or less effective the higher the interest elasticity of money demand? Explain.
If the Fed wants to increase the money supply it will buy bonds. True False
Suppose the Fed decides to implement expansionary monetary policy. This will likely result in a _____ in the money supply and a _____ in interest rates. increase or decrease?