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- 15 ) Monetary Approach with a constant velocity Money supply growth has steady been 2% higher in Japan than in the US and output growth has steady been 2% lower in Japan than in the US. ThenO1 a) (E_S/Yen) has been rising by 4%02 b) (E_S/Yen) has been falling by 4%03 c) (E_S/Yen) has been invariant 04 d) real interest rate has been higher in JapanO5 e) two of (a)-(d)The central bank of the Dominican Republic decides to pursue acontractionary monetary policy. Provide a table with the money supply data and inflationrate for the Dominican Republic for 2014 - 2019.(c) Based on the data from the Dominican Republic, do you agree with thecentral bank’s decision to pursue a contractionary monetary policy? Explain why orwhy not. (d) Identify a newspaper article from the Dominican Republic that provides asituation in which a contractionary monetary policy was implemented by the centralbank. Ensure that you provide a screenshot of the article in your submission. Thescreenshot should include the name of the publication, date of publication and nameof the article.(i) Identify the contractionary monetary policy used in the article. (ii) Carefully explain, in as much detail as possible, how the chosen action from thearticle will impact the money market. (iii) Illustrate using the money market diagram, the overall impact of the chosen actionfrom the article on…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.
- A Suppose the difference between the transactions velocity and the income velocity of circulation of money in an economy is 5 and the money value of total transactions is 6 times the money value of aggregate income. If the quantity of money in circulation is 1000 currency units, then the money value of aggregate income in currency units is (a) 1000 (b) 1200 (c) 1500 (d) 180014. If the expected inflation rate is 5% and negotiators agree that the real wages should rise by 7%, the two sideswill agree to an increase in the money wage ofA 2%B 5 %C 7 %D 12%COVID-19 has resulted in many persons being unable to work and has led to a decrease in economic activity in the Caribbean and the rest of the world. (a) Carefully explain and illustrate uusing a agraph the effect of this decrease in economic activity on the money market.
- Figure 15-2 Interest MS2 MS1 rate, i 4% A MD 950 Quantity of money (billions of dollars) 900 18) Refer to Figure 15-2. In the figure above, the moven point B in the money market would be caused by A) an increase in the price level. B) a decrease in real GDP. C) an open market sale of Treasury securities by the Fede D) a decrease in the required reserve ratio by the Federal 3.Price stability: Suppose you are the head of the central bank and your mandateis to maintain the price level at a constant value. Explain what you would doto the money supply in response to each of the following events:(a) Real GDP increases by 4% during a boom.(b) Real GDP declines by 1% during a recession.(c) Real GDP is growing at 3% per year.(d) Te velocity of money increases by 2%.(e) Te velocity of money declines by 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.
- It is not unusual to find a business that displays a signsaying “no personal checks, please.” On the basis of thisobservation, comment on the relative degree of liquidityof a checking account versus currencyYou are employed at an Economics consulting firm called Eco Xcel. You have been approached bya client who read the article below entitled, “Another big hike raises South African interest ratesnear pre-Covid levels” and who has very limited understanding of monetary policy and how itworks. He has asked you to write a report that provides some clarity on Monetary Policy in thecontext of the South African economy. JOHANNESBURG (Reuters) -South Africa’s central bank delivered another big interest rate hike onThursday, taking its main lending rate back near pre-COVID levels as it battles to bring inflationback to target.The South African Reserve Bank (SARB) raised its repurchase rate by 75 basis points (bps) to6.25%, in line with the forecast of the majority of economists polled by Reuters. The rand pared gains against the U.S. dollar after the decision was announced, as some tradershad positioned for a larger hike.The SARB has now raised rates for the sixth time in a row, adding a total of…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?