ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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- An expansionary policy aims at increasing the money supply, which of the following is an example of expansionary monetary policy? a. Increasing reserve requirements. b. Increasing the federal funds rate and the discount rate. c. The fed buying treasuries from banks. d. The fed selling treasuries (government bonds).arrow_forwardAnswer quickly please fastarrow_forwardWhat would likely be the short-term impact on a country's inflation rate if the central bank significantly increases the money supply? A. The inflation rate would decrease. B. The inflation rate would remain unchanged. C. The inflation rate would increase. D. The inflation rate would initially increase, then sharply decrease.arrow_forward
- Suppose a country's nominal GDP is $120 billion. The money supply is $100 billion. What is the velocity?arrow_forwardSuppose that the Bank of Canada determines that the Canadian economy is currently overproducing. What can the Central Bank do to slow down economic activity? a. The Central bank can pursue an expansionary monetary policy by increasing the money supply, causing a decrease in the interest rate. As a result, real GDP will increase and the price level will increase. b. The Central bank can pursue a contractionary monetary policy by decreasing the money supply, causing a decrease in the interest rate. As a result, real GDP will decrease and the price level will decrease c. The Central bank can pursue a contractionary monetary policy by decreasing the money supply, causing an increase in the interest rate. As a result, real GDP will decrease and the price level will decrease. d. The Central bank can pursue a contractionary monetary policy by decreasing the money supply, causing an increase in the interest rate. As a result, real GDP will decrease and the price level will increase e. The…arrow_forwardWhich 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 consumptionarrow_forward
- If the money supply is $60 and nominal GDP is $360, then Group of answer choices A) the velocity of money must be 300. B) the velocity of money must be 4.2. C) the velocity of money must be 3. D) the velocity of money must be 60. E) the velocity of money must be 6.arrow_forwardHow stable is the velocity of money?arrow_forwardThe number of times per year each dollar is spent A. Money Supply B. Velocity C. Price Level D. Quantity of Output E. All of the abovearrow_forward
- What is the expected impact of a decline in the money supply to the US economy? A. Higher aggregate prices (inflation) B. Lower aggregate prices (deflation) C. There is no general relationship between the money supply and inflatonarrow_forwardAn economy has a money supply of 1,052, money velocity of 10, and output of 1,048. How much will the price level change if output and money supply remain the same and the money velocity rises to 16? Round your answer to the nearest two decimal place.arrow_forwardPlease help with this Questionarrow_forward
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