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. B. maximizing sustainable employment. C. keeping interest rates moderate. D. promoting stable prices.
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- Economics To increase the money supply, what could the Federal Reserve do? Choose one or more: OA. make an open market sale OB. decrease the discount rate O Cincrease income taxes OD. increase the discount rate O E. make an open market purchaseIn the presence of shocks, monetary policy cannot be used to stabilize both the inflation rate and GDP. O a. Consumer confidence O b. Export ion O c. None of the answers is correct O d. ImportWhich of the following represents a short-run e_ect of a monetary contraction? Select one: O a. an increase in the interest rate O b. a reduction in the price level O c. all of the above O d. a reduction in output
- 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.Monetary policy affects the economy with a lagmainly because it takes a long timea. for central banks to make policy changes.b. to change the money supply after a policydecision has been made.c. for a change in the money supply to affectinterest rates.d. for a change in interest rates to affect investmentspending.What are the two goals of monetary policy? Oa. Maximum employment and low and stable inflation Ob. Maximum employment and high and stable inflation Oc. Minimum employment and stable inflation Od. Controlled government spending and low taxes
- Which of the following monetary policy action is intended to reduce inflation? Select one: a. Lowering of the discount rate b. None of the above Oc. Sale of government securities such as Treasury bonds O d. Lowering of reserve ratio O e. Reduce the interest rate on excess reservesWhat do economists mean by the "time value of money"? O A. The way that the value of a payment changes depending on when the payment is received. B. The fact that it takes time to make money. OC. The fact that money has value only if you have the time to enjoy it.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 Fini
- Which statement is true? O Austrians believe that financial markets are always efficient and that no central bank intervention will cause 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#l), whereas Keynesians believe fınancial markets are efficient (S=1).If policymakers use contractionary monetary policy to reduce inflation in the short run: O they must be willing to accept a higher rate of unemployment. O the unemployment rate will be below the natural rate of unemployment. the unemployment rate will be above the natural rate of unemployment. O the unemployment rate will be at the natural rate of unemployment.Which of the following would be classed as an expansionary monetary policy? Ο Α. A decrease in the quantity of money. ОВ. A decrease in interest rates. C. An increase in government taxation. O D. An increase in government expenditure. O E. An increase in VAT.