The Fed's Policies under Volcker In the years 1979 to 1982, under the leadership of Paul Volcker, the Fed adopted a tight money policy to reduce the nation's inflation rate. Based on the aggregate supply - aggregate demand model, what would happen to the price level in the long run as a result of the Fed's tight money policy under Volcker's leadership? Choose one answer below: O The price level would end up higher in the long run. O The price level would end up lower in the long run. O The price level would end up at its initial level in the long run.

Suppose inflation is still high be mid-2022 and the Fed chair announces his/her policy. Suppose his or her approach to monetary policy can be summarized by the following statement: “I care only about inflation. Unemployment is at very low levels for quite some time” b) What would be the effect on the aggregate demand curve?

If a recession persists due to nominal wage and price stickiness (slow adjustments of nominal wages downward) what kind of monetary policy can bring us out of this recession?  contractionary monetary policy neutral monetary policy  raising interest rates and decreasing money supply growth

Starting with a long run equilibrium, a Fed policy insisting on an even higher GDP may lead to a higher inflation only. O a surplus in the labor market in the short run. lower wages in future. a higher GDP per capita in the long run.

On the following graph, shift the curve or drag the blue point along the curve, or do both, to show the long-run effects of the increase in the money supply. 6 8 10 12 UNEMPLOYMENT RATE (Percent) In the long run, the increase in the money supply results in in the inflation rate and in the unemployment rate (relative to the economy's initial equilibrium). INFLATION RATE (Percent)

1. Based on the most recent announcement made by the RBA Governor (see the RBA Statement on the Monetary Policy Decision for May 2023 below), identify what type of monetary policy did the RBA implement in this announcement? Which part of the AD-AS model is this policy aiming to shift and in what direction? What does the RBA’s monetary policy decision tell us about which phase of the business cycle we are currently in, and which economic indicator the RBA is most concerned about? (3-4 sentences) 2.  In its announcement, the RBA Governor refers to “the importance of returning inflation to target.” As part of your Policy Brief, explain what is meant by the inflation target and how does an inflation target contribute to good economic management? Based on the news updates that we discussed in our lectures and tutorials throughout this course, what are some factors that are currently contributing to inflationary pressures in Australia and globally, and which part of the AD-AS model are…

please answer in text form and in proper format answer with must explanation , calculation for each part and steps clearly

Suppose the Fed doubles the growth rate of the quantity of money in the economy. In the long run, the increase in money growth will change which of the following? Check all that apply. O The size of the labor force O The level of technological knowledge The price level The inflation rate Suppose the economy produces real GDP of $40 billion when unemployment is at its natural rate. Use the purple points (diamond symbol) to plot the economy's long-run aggregate supply (LRAS) curve on the graph. 132 128 LRAS 124 120 116 Q112 + PRICE LEVEL

The economic response to the overnight reduction in the French money supply by 20 percent in 1724: confirmed the quantity theory by leading to an immediate 20 percent reduction in the price level. O confirmed the neutrality of money because no real variables were affected by this nominal change. confirmed that money is not neutral in the short run because both output and prices dropped. contradicted Okun's law because decreases in output were not associated with increases in unemployment.

Answer ONLY parts C and D.