Hello, I would like help with this assignment Thank you! Monetary Policy Assume the economy is inflationary where Y>Y* and P<P* demonstrate the state of the economy graphically and explain. Assume the MPC for the US is 80% and the government decides to increase regulation on business such that the cost of doing business increases by 3% or $500 billion dollars per year in the aggregate. Demonstrate and explain your answer fully. What Monetary Policy should the Federal Reserve Implement? What choices do they have to effect this policy? Demonstrate and explain the effects of this policy on the economy? Hint use the 5 steps from class

What did Friedman and Phelps argue about the effectiveness of monetary policies?     As long as people’s inflation expectations were fixed, an increase in the money supply growth rate could not change output in the short or long run.     If people’s inflation expectations were fixed, in the short run, a decrease in the money supply growth rate could raise output and unemployment.     When the money supply growth rate changed, people would eventually revise their inflation expectations so that any change in unemployment created by an increase in the money supply growth rate would be temporary.     When the money supply growth rate changes, people slowly adjust their inflation expectations; therefore, the unemployment rate changes only in the long run but not in the short run.

Read the statements below carefully, and decide whether it is true or false. And then explain your answer (whether “true “ or “false”).   1.A recession is defined as a period when the economy’s average price level is rising. 2. Inflation caused by a rise in per-unit production costs is referred to as demand-pull inflation.   3. Both final and intermediate goods and services should be counted in national income accounts.   4. A contractionary monetary policy will cause the general price level to rise in the short run.   5. If net exports is positive, a nation's exports of goods and services exceed its imports.

When the economy slows down heading towards a recession, then the appropriate monetary policy would be ... Group of answer choices a. Expansionary b. Contractionary