An econometric study of the dynamics of monetary policy using U.S. data covering three decades indicates that OA the IS-LM model accurately captures the short-run behavior of the economy in response to these policies. -OB. the IS-LM model fails completely to predict the economy's short-run response to policy changes. OC. only the long-run behavior of the economy is accurately captured by the IS-LM model. OD. use of the IS-LM model for prediction purposes is basically a risky or uncertain estimate The predictive reliability of the IS-LM model appears to weaken over time because the assumption of a given price level becomes realistic less more

Suppose you observe the time series of output y and real money supply M/ P reported in the Figure below. Nominal money supply M is under full control of the Central Bank. Output y Real Money Supply M³/P Time t Time t 1 3 4 1 2 3 4 6. Interpret these time series using the ASAD Redux model with workers misperceptions (Lecture Notes, Chapter 1). Assume that the time paths are caused by a single permanent shock hitting the economy at time t= 1, and interpret time t = 6 as the medium run. Your general task is to guess what type of shock can be responsible for the observed time series. Answer each of the following questions, providing clear motivation for your statements: (a) Can the shock be a permanent change, positive or negative, in public expenditures G? Motivate your answer.

Please no written by hand solution tle shifts the Central Bank rule to the right. O a. An increase in the Z factors O b. A decrease in the price level O c. An increase in government spending O d. A decrease in government spending

Pls help with below homework.

As monetary policymakers become more concernedwith inflation stabilization, the slope of the aggregatedemand curve becomes flatter. How does the resulting change in the slope of the aggregate demand curvehelp stabilize inflation when the economy is hit with atemporary negative supply shock? How does this affectoutput? Use a graph of aggregate demand and supply todemonstrate.

Which of the following statements is true for the scenario illustrated in the below diagram? LRAS Price Level (base year = 100) 120 110 100 90 80 400 SRAS E₁ 700 Eo AD AD₁ 500 600 Real Output (constant dollars) 800 O it illustrates a recessionary gap at Eo Oit illustrates expansionary monetary policy by shifting ADO to AD1 O it illustrates procyclical monetary policy O it can be caused by a tightening of the money supply, also known as contractionary monetary policy

QUESTION 3 Refer to the graph shown below. Suppose the economy is initially at A but then the Fed adopts a contractionary monetary policy. Using the AS/AD model reasoning, this policy will cause the economy to move to LAS Price level C D 4 0 OC in the short run COC in the short run SAS, SAS, AD AD, SAS, AD, Bel output CAA in the short run and the long run. B in the short run and the long run and A in the long run. and E in the long run.

The Federal Reserve seeks to reduce The Fed doesn't seek to reduce the unemployment rate to zero because the tools of monetary policy are OA. only effective in reducing the level of frictional unemployment. OB. ineffective in reducing the level of cyclical unemployment. OC. ineffective in reducing the level of frictional unemployment. OD. All of the above. Note:-   Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.

please answer in text form and in proper format answer with must explanation , calculation for each part and steps clearly

The long-run Phillips curve is vertical because it is O a. consistent with the conclusion of Friedman and Phelps, but it is not consistent with the classical idea of monetary neutrality. Ob. consistent with the classical idea of monetary neutrality, but it is not consistent with the conclusion of Friedman and Phelps. Oc. consistent with both the conclusion of Friedman and Phelps and the classical idea of monetary neutrality. Od. consistent with neither the conclusion of Friedman and Phelps nor the classical idea of monetary neutrality. QUESTION 41 If there is a favorable supply shock, inflation will O a. increase and shift the short-run Phillips curve left. Ob. decrease and shift the short-run Phillips curve right. Oc. increase and shift the short-run Phillips curve right. Od. decrease and shift the short-run Phillips curve left. QUESTION 42 If there is a favorable supply shock causes, then O a. the price level decreases. To counter this a central bank would decrease the money supply.…