If the economy is experiencing an inflationary gap, then which of the following is a proper Federal Reserve response to close this gap?  Check all that apply. Group of answer choices Buy U.S. bonds. Increase the discount rate. Increase taxes. Decrease the reserve ratio. Decrease government purchases. Sell U.S. bonds.

Q: You will answer the following questions listed below. You will submit a Word document that will…

A: With regards to economics, "fed" is most normally used to allude to the Federal Reserve System. The…

Q: Which of the following is the sequence of events following an expansionary monetary policy? A )…

A: Expansionary monetary policy refers to a set of actions and measures undertaken by a central bank to…

Q: Suppose equilibrium GDP is less than full-employment output and the economy is in a recession. What…

A: GDP refers to the total value of finished goods and services that produced within the economic…

Q: Loose monetary policy   a)  typically slows down the economy   b)  typically ignites the…

A: Monetary policy is conducted by the central bank of the country in order to control the money…

Q: Which of the following is NOT one of the factors in the FED "rule" used to determine if Monetary…

A: A monetary policy of an economy is a tool by which a government or central bank changes the money…

Q: If Money Supply is $12,500, price level is 6.3, and velocity of money is 2.8, then how much is the…

A: Money supply refers to the quantity of money in an economy. Velocity refers to number of times money…

Q: give your recommendation on monetary policy as if you were President of the Dallas Federal Reserve…

A: Monetary policy refers to the actions taken by a country's central bank to regulate the money supply…

Q: Suppose the economy is experiencing inflation. Which of the following would be a corrective measure…

A: Inflation refers to a situation when price level increases in an economy. Government can use open…

Q: a. How might fears of a zero lower bound justify such a policy, even if the economy was not actually…

A: Given:In 2003, as the U.S. economy finally seemed poised to exit its ongoing recession, the Fed…

Q: An increase in the interest rate will cause an increase in the demand for money. True False

A: Demand for money depicts when people demand more money to fulfil their needs and wants. It depends…

Q: True or false.  The data show that the velocity of M1 is unchanging, which is one reason for why…

A: The question relates to the economic theory called the Quantity Theory of Money.

Q: 4. Is the Fed out of Ammo? Since the end of the Great Recession, interest rates have been at…

A: When a central bank utilizes its instruments to stimulate the economy, it is known as expansionary…

Q: Which of these statements is true? Select all correct answers. Relative to February 2021, the…

A: The correct answers are - The federal reserve buys and sells assets such as U S treasury bonds in…

Q: Banks access capital from the Federal Reserve by: participating in Fed Funds using Repos Buying…

A: Federal reserve system often known as "fed" is the central bank of the united states. It uses its…

Q: One of the advantages of monetary policy is its speed and flexibility, but there are limitations.…

A: Monetary policy is the policy of the central bank of the economy to influence the money supply in…

Q: Which of the following is a position held by monetarists? Changes in the velocity of money are…

A: Monetarism emerged during the 1950s and 1960s through the contributions of economists like Milton…

Q: he policy lever most commonly used by the Fed is   changing the discount rate changing the reserve…

A: The Federal Reserve in the U.S was created on 23rd December 1913. It is the central bank of the U.S.…

Q: Which of the following is an example of a contractionary policy? A) Raising reserve ratio B)…

A: Contractionary policy refers to those policies that are reduces the money supply in the economy.

Q: Money supply decreases if the central bank reduces overnight policy rate. buys back government…

A: The money supply is the total amount of currency and liquid assets in a country's economy on the…

Q: The major problem facing the economy is high unemployment and weak economic growth. The inflation…

A: The central bank of a country controls and regulates the money supply by introducing monetary policy…

Q: Which of the following are reasons why the Fed targets an inflation rate greater than 0%? Inflation…

A: Inflation measures the rate at which the general price level in an economy rises.

Q: According to monetarists in the context of self-regulatory theory, if the economy is initially in…

A: Monetarists can be described as a group of macroeconomists who emphasize the importance of the money…

Q: If the money supply increases, and the price level is unchanged, interest rates will fall. True or…

A: According to the theory of liquidity preferences, the equilibrium interest rate in the money market…

Q: The money supply of a country has been growing for many years causing expected inflation of 8% per…

A: According to the Friedman rule, the growth of the money supply should be equal to the estimated…

Q: Policymakers believe that the economy is experiencing a recession, and they have agreed on the need…

A: A "lag" refers to a delay or time gap between an action or event and its observable effects or…

Q: When the Federal Reserve lowers the discount rate, this indicates they are pursuing --------- a)…

A: Any policy employed by Federal reserve would be classified as monetary policy which could be either…

Q: POLICY PERSPECTIVES Like all human institutions, the Fed makes occasional errors in altering the…

A: The money supply refers to the total sum total of all of the currency and several liquid assets in…

Q: hrough open market operations (OMO) the Federal Reserve buys and sells government securities to…

A: (A)

Q: Which of the following constitute the Federal Reserve's dual mandate? Question 14 options:…

A: Federal reserve have many goals while dealing in the economy. Here we find that mainly it have two…

Q: In response to the Covid-19 pandemic, the U.S. Federal Reserve has lowered the target federal funds…

A: There are different policies that are used by the government to attain the desired shifts in the…

Q: If monetary policy tries to keep GDP above its full employment level for an extended period of time…

A: When an economy manufactures goods or products at higher economic rates than normal, it is regarded…

Q: The Chairman or Chairlady or Fed Chair (a politically correct term) of the Federal Reserve Bank has…

A: Federal Open Market Committee:A policy-making body within the Federal Reserve System responsible for…

Q: If the Federal Reserve tries to target inflation near 2%, the inflation rate is 3%, and output is 3%…

A: The formula of Taylor rule is as follows:

Q: choose Fate is at as target rate of 2 percent and the unemployment rate is close to or at the target…

A: The rate at which prices for goods and services generally increase and a currency's purchasing power…

Q: The Tools available when using fiscal policy are Interest Rates The Federal Reserve Open Market…

A: Fiscal policy is the policy enacted by the government. It includes managing taxation and government…

Q: Following the Great Recession, the Federal Reserve adopted a restrictive reserve policy.   true…

A: Following the Great Recession, the Federal Reserve adopted a restrictive reserve policy. This…

Q: What are the goals of monetary policy? maximum employment and stable prices zero unemployment and…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: During a period of inflation, an appropriate pair of policies for the Fed to implement would be to…

A: Answer: Correct option: B (sell government securities and raise the discount rate) Explanation: In…