inflation

Policies and Policymakers “Bank Indonesia (BI) has emphasized that it will not print money to help fund the surge in government spending to fight the COVID-19 pandemic. BI Governor Perry Warjiyo said the suggestion to print money was not a prudent monetary policy, pledging that the central bank would never take the measure. “This is an unusual policy and BI will never take such measures, including giving out money to the general public to face the COVID-19 pandemic,” Perry told reporters on Wednesday. “I am very sorry, but we should not confuse the public.”” -The Jakarta Post Why did BI decide on the prudent policy, which is to not to print money despite the fear of economic recession due to Covid-19 pandemic? What are other policy options for a central bank during the crisis?

Both increases in the price level and increases in real GDP will decrease the demand for money True False

Suppose that the money supply increases by 20 percent. If there is no inflation, what does the quantity theory of money tell us must happen to real GDP? (Assume that the velocity of money is constant.) Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a It must increase by more than 20% It must increase by less than 20% C It stays the same d. It must increase by 20%

Suppose that the money supply increases by 20 percent. If there is no inflation, what does the quantity theory of money tell us must happen to real GDP? It must increase by more than 20 percent. It must increase by less than 20 percent. It must increase by exactly 20 percent. None of the above are correct.   Which of the following statements is true of the federal funds market? No banks are refused loans in the federal funds market. In the federal funds market, banks with a shortage of reserves borrow funds, while banks with an excess of reserves lend them out. The interbank lending system works more efficiently in periods of financial panic than in periods of financial stability. Although the federal funds market aims to provide liquidity to needy banks, it is not very popular as overnight loans are logistically inefficient for large banks.   On a graph with real GDP growth on the x-axis and the unemployment rate on the y-axis, you plot each year's values for the United States as…

In general, when there is less competition in the banking sector ( a lower supply of firms),     nominal interests rates decrease, which makes it easier for business owners to obtain a loan.     inflation decreases, which is better for the economy as a whole.     nominal interest rates increase, which is good for businesses.     nominal interest rates increase, making it more difficult for business owners to obtain loans, which is bad for the economy as a whole.

Attempt the following multiple choice questions: 1. The velocity of money represents: (a) Whether individuals are increasing or decreasing the quantity of money spent in an economy (b) The quantity of money available in an economy (c) The level of prices determined by the equation of exchange (d) How often money is used in a specific period of time (e) Whether currency is accepted as a medium of exchange in an economy 2. According to the quantity theory of money, (a) Increases in the money supply will lead to inflation, ceteris paribus (b) The level of inflation is independent of the money supply (c) The money supply times the velocity equals the real GDP (d) When real GDP rises, the money supply must fall by the same proportion (e) The velocity of money is assumed to fluctuate widely over time 3. Monetarists differ from Classical economists in their view of money in that monetarists believe: (a) The velocity of money is relatively constant over time (b) Prices are not influenced by…

Suppose there is an increase in money supply, as a result interest rates will Multiple Choice rise and the quantity of money will increases. fall and the quantity of money will remain constant. rise and the quantity of money will decrease. fall and the quantity of money will increases.

Describe the Fiscal Policy and the monetary policy and explain how The two policies are used to control money supply in the economy.

A country's central bank is engaging in monetary contraction, with M going from M0=40 to M1=20. Its economy is as follows. Goods: slc = 3 MPC = 0.7 G = 10 T = 9 Before the policy, the goods market equilibrium is at Y0 = 54. Financial: I = 18-200r Before the policy, the loans market equilibrium is at r = 4.25% and I = 9.5 Money: M0 = 40 P0 = 2 M/P = 0.02 / (r - Y/5000)^2 and finally, Labor: w = MPL = 0.5 * 4.5 * 16^0.6 / L^0.5 w = EP / P0 * L^0.5 Where workers currently expect the price level of EP=2. -  There are four endogenous variables that adjust in response to shock/policy: Y, I, r, P. The policy variable of interest is M. Therefore, let's approach our solution by first recognizing that all other letters are just constants and plug them in. For example: Y = 2 + 0.5(Y-6)+7+I becomes Y = 12 + 2*I First, express the goods market as expenditure being a linear function of investment I of the form: Y = a + b*I   1. How does the monetary contraction directly and immediately affect the…