Short-run monetary policy changes should Multiple Choice Oignore any fiscal policy change that a government has implemented allow for modest adjustments once feedback from previous changes is available never be implemented if uncertainty exists about the exact effects of monetary policy on key variables

“If autonomous spending falls, the central bank shouldlower its inflation target in order to stabilize inflation.”Is this statement true, false, or uncertain? Explain youranswer

Assume you are a member of the Federal Reserve, and you are adhering to the dual mandate. The economy reflects the following:  2018 CPI: 115  2019 CPI: 121.9  Potential GDP: $20 trillion  2019 Real GDP: $21 trillion  Natural rate of unemployment: 4.00%  2019 unemployment rate: 3.50%  Sketch a graph of the AD-AS Model. Be Sure to label all parts of the graph. Notate what type of gap you have and be sure to reflect it in your graph.  What monetary policy tools can be used to fix the gap identified in part A?  Assume you have adopted the Taylor Rule. Calculate the targeted federal funds rate if the equilibrium real federal funds rate and target rate of inflation is both 2%.  Graphical demonstrate the effects your recommended change of the Federal Funds Rate has on the reserves market, the money market, and the loanable funds market. Note that you should have three separate graphs, one for each market, but you do not have to worry about finding the quantity of reserves, money, or…

In the last year there has been a significant increase in the inflation rate in Canada. Use the Keynesian transmission mechanism to explain fully the impact of this increase in inflation on each of the following: The money supply The demand for money The interest rate Aggregate Demand GDP. Remember to use subject