One tension that occurs in central banking in a democracy is O Central bankers only think on a short term basis. O Politicians usually know what is best for the economy in the long run, but central bankers have no incentive to listen to them. O There is nothing that central bankers can do to boost the economy in the short run. O Politicians who are elected for short terms are often more willing to accept (and sometimes encourage) a looser monetary policy in order to boost the economy and increase their chances of being re-elected, despite the negative long-term consequences for the economy.

One tension that occurs in central banking in a democracy is O Central bankers only think on a short term basis. O Politicians usually know what is best for the economy in the long run, but central bankers have no incentive to listen to them. O There is nothing that central bankers can do to boost the economy in the short run. O Politicians who are elected for short terms are often more willing to accept (and sometimes encourage) a looser monetary policy in order to boost the economy and increase their chances of being re-elected, despite the negative long-term consequences for the economy.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Similar questions

Write True/False for the statements below with explanation.
An economy begins in long-run equilibrium. a. Consider the formulation of an oil cartel. Illustrate and explain how this affects prices and output over time. b. If the goal of the Fed is to stabilize the output, what should the Fed do with the money supply in response to this change? Illustrate and explain.
In regard to monetary policies, nonactivists have various proposals. True or False: Some nonactivists believe in the Taylor rule, which suggests that the annual money-supply growth rate should be based on the growth rates of velocity and Real GDP to ensure that the price level does not fluctuate. O False O True Which of the following statements best explains the difference between the Taylor rule and the two other nonactivist rules (the constant-money growth rate rule and the predetermined-money growth rate rule)? O The Taylor rule does not take into account the stability of prices. O The Taylor rule suggests how much the money supply should grow. O The Taylor rule does not take into account the current state of the economy. O The Taylor rule is not a derivation of the equation of exchange.
Q8
But even though the CBs was in existences at the time of the Global Crisis of 2008/9, they could not have prevented that crisis. In fact they looked completely unprepared for that even. Question Do we really need a Central Bank in our Country? If they are so important to the fiscal and monetary objective of any country, why have their roles as a financial watchdog as it relates to several economic crisis, open more suspicion. In fact they seem most of the times totally unprepared to deal with the pending economic fallout? Many will argue as well that the CB seem to be more reactive rather than proactive. Critically discuss.
During the global financial crisis, how was the Fed ableto help offset the sharp increase in financial frictionswithout the option of lowering interest rates further?Did the Fed’s plan work?
How does rule-based monetary policy differ from discretionary monetary policy(that is,monetary policy not based on a rule)? What are some of the argument for each?
If there is a temporary demand shock (the demand decreases) and the Fed or the government decides to “do nothing” and to wait for the economy to “fix itself,” which curve(s) will automatically shift on the graph to represent this adjustment?Group of answer choices 1There is a curve that is vertical but it is neither the supply curve nor the demand curve. 2The demand curve. 3The supply curve. 4No curve is vertical in the currency exchange market graph.
In regard to monetary policies, nonactivists have various proposals. True or False: Some nonactivists believe in a predetermined-money growth rate, which suggests that the monetary authorities should target the proper federal funds rate before implementing monetary policies. O True O False Which of the following statements best explains the difference between the Taylor rule and the two other nonactivist rules (the constant-money growth rate rule and the predetermined-money growth rate rule)? O The Taylor rule does not take into account the stability of prices. O The Taylor rule is not a derivation of the equation of exchange. O The Taylor rule suggests how much the money supply should grow. O The Taylor rule does not take into account the current state of the economy.
The Fed was established in 1933. O True O False
Would the Federal Reserve INCREASE or DECREASE the nation’s money supply during a period of recession? Would the Federal Reserve INCREASE or DECREASE the money supply during a sustained period of inflation? Would the Federal Reserve RAISE OR LOWER the discount rate during a period of recession? Would the Federal Reserve BUY or SELL securities during a time of sustained inflation? Which actions did the Federal Reserve most likely take in order to accomodate the Stimulus Checks during the pandemic?
Discuss the similarities and differences between monetary policy and fiscal policy as a tool toregulate an economy? no referance material and can you answer me as soon as possible