A government can increase the supply country's central bank to issue more simply telling the money. .A country in which price inflation running wild should expect to see its currency against that
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- To fight inflation, another monetary policy tool the Fed could use is to change the reserve requirement. With the reserve requirements, and as the result, the equilibrium federal goal of curbing inflation, the Fed should funds rate will A increase; drop OB. decrease; rise C. decrease; drop D, increase; riseConsider the monetary policy rule under financial frictions. If f >0 the prevailing market real interest rate will be the federal funds rate? equal to lower than higher thanConducting monetary policy so that the FF rate = 1.25%, where the FF rate is the nominal federal funds interest rate, is an example of : A. an active policy rule. B. a passive policy rule. C. discretionary policy. D. an automatic stabilizer.
- When one currency declines against the dollar, it may correspond to lower inflation in the foreign country and as a result, historical operating income and ROI's will be higher. True or False ?In order to be able to support the national currency and to achieve inflation,as it should be in the parameter(s)? And this trip, the currency is risky,What is the effect on interest risk, price risky, country profitable risk? analyze andPlease comment.Moody's rating downgraded from 'Ba' to 'B',Foreign direct investment is low,Portfolio Investments are high,Inflation rate: 15%Interest rate: 10%TL / $ = 0.2755(a) Suppose that the economy of Microland is expanding rabidly. Due to this rapid expansion, the Federal Reserve Bank is pursuing a contractionary monetary policy. Draw clearly labeled graphs for each market (Money market, Goods Market and Investment) to show the effects of this policy on the equilibrium interest rate, investment and output. (b) Suppose that the economy of Macroland is expanding rabidly. Due to this rapid expansion, the Federal Government is pursuing a contractionary fiscal policy. Draw clearly labeled graphs for each market (Money market, Goods Market and Investment) to show the effects of this policy on the equilibrium interest rate, investment and output. Is there any crowding-out due to the contractionary fiscal policy?
- The U.S. economy is on track of sustainable growth now. This leads to fears of inflation and likely action by the Federal Reserve to raise interest rates to contain inflation. Based on the asset market(pricing) approach, the U.S. dollar will become weaker. True FalseIf a central bank decreases interest rates, then gradually: a. the country's gross domestic product is likely to decrease. b. foreign exchange rate is likely to appreciate. c. demand for exported goods and services is likely to increase. d. flows of investment funds into the country are likely to decrease.If the Fed ____ the interest rates when inflationary expectations remain unchanged, the most likely result is that the value of dollar will ____ and the economy may ____. A. increases; appreciate; weaken B. decreases; appreciate; weaken C. increases; depreciate; strengthen D. decreases; appreciate; strengthen
- Q (B) Which of the following statements about central bank objectives are true? A. Central banks can have several objectives, but their actions need to provide a “nominal anchor” for the economy B. All statements are true C. A strict inflation target is a way to provide a “nominal anchor” for the economy D. In principle, one of the goals of a central bank could be to slow down climate changeWhat effect would each of the following events likely have on the level of nominalinterest rates?1. Households dramatically increase their savings rate.2. Corporations increase their demand for funds following an increase in investmentopportunities.3. The government runs a larger-than-expected budget deficit.4. There is an increase in expected inflation.13.) What are derivative securities? Why do they exist? 14.) 2020 was year the COVID-19 global pandemic. Specifically explain how both monetary and fiscal policy have been used in the United States as a reaction to date. 15.) What causes the basic changes to overall supply and demand for money and loanable funds?