d. If the Central Bank intends to pursue monetary policy in order to restore output to the same level before the fall in consumer confidence, how much should money supply change by? Use graphs to show the change in the economy and explain very carefully the monetary transmission mechanism. |

Which of the following scenarios below BEST matches an inflationary monetary policy aka a “loose money” policy?   a.Buying bonds increases the money supply, which lowers the interest rate b.Increasing taxes increases the reserve requirements, which decreases investment c.Increasing the discount rate lowers the real interest rate, which raises investment d.Selling bonds decreases the money supply which increases the interest rate e.Decreasing government spending lowers the interest rate, which lowers consumption

In an economy where the central bank implements negative interest rates as a monetary policy tool, what is the most likely short-term impact on consumer savings behavior and bank profitability? A. An increase in consumer savings as people seek to safeguard their money and a rise in bank profitability due to increased lending. B. A decrease in consumer savings as the incentive to save diminishes and a decrease in bank profitability due to lower interest margins. C. No significant change in consumer savings behavior but an improvement in bank profitability due to lower borrowing costs. D. A shift in consumer investment towards riskier assets and challenges in bank profitability due to compressed interest margins. Please don't use chatgpt it is giving wrong answer and please provide valuable answer

3. If the economy is at the natural rate of unemployment with the level of real GDP at potential output, what would expansionary fiscal or monetary policy do to the economy? How would the economy be affected in the short run and long run?