1. The structure of the Bank of Canada Which of the following are objectives that the Bank of Canada tries to achieve when setting monetary policy? Check all that apply. Maximizing economic growth Zero unemployment Price stability Keeping inflation between 1 and 3 percent Zero inflation
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- 14. Which of the following is the main goal of contractionary monetary policy? a.An increase in the money supply b.An increase in spending c.An increase in aggregate demand d.A decrease in the money supply4the money supply in freedonia this year is $150 billion Nominal GDP is $750 billions and real GDP is $250 billion. assuming that velocity of money is stable real GDP grows by 2%this year and the money supply does not change. what are the velocity price level and inflation rate1. Write on any THREE (3) functions of a Central Bank. B. Discuss TWO (2) ways in which a Central Bank controls money supply within a country C. Explain the term 'inflation'. D. Describe TWO (2) types of inflation. E. Assess TWO (2) ways in which inflation may have an impact on an economy.
- What are some of the new stimulative monetary policy tools that the Fed used during the 2007-2009 recession? Select all that apply. Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer a b C d purchase short term debt purchase long term U.S. governnt bonds purchase long term government-sponsored enterprises purchase short-term bondsa. tax increase b. economic growth c. expected inflation d. income increase e. currency appreciation f. technology breakthrough Which ones of the above economic factors will increase money supply? Which ones of the above economic factors will increase demand for money ?What is the main tool used by central banks to influence short-term interest rates and the money supply? A. Fiscal policy B. Open market operations C. Exchange rate policy D. Price controls
- 20. The type of monetary policy that is used in Canada, New Zealand, and the UK is Question 20 options: a) interest-rate targeting. b) inflation targeting. c) monetary targeting. d) targeting with an implicit nominal anchor.The central bank of Barbados decides to pursue an expansionary monetary policy. i) identify one possible action they could take ii) Carefully explain in as much detail as possible, how the chosen action will impact money market. iii) Illustrate with a diagramthe overall impact of the chosen action on the money market.22. The Federal Reserve System achieves its goals in the following way O A. controlling interest rates to influence investment and economic activity O B. setting the inflation rate by controlling prices O C. controlling the spending by banks to influence economic activity O D. provide unemployment insurance to lessen the burden of unemployment on the labor force.
- 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%.The Objectives of the Central Bank excludes which of the following? O a. Financial System Stability O b. Low stable Inflation O C. Economic Stability O d. Low Unemployment RateThe bank credit expansion that initiates the inflationary boom is caused by A. Irrational over-optimism on the part of entrepreneurs and business B. Banks reducing their credit standards and lending more funds C. The Fed's injection of new reserves into the banking system
