Use the monetary approach to answer each of the following. Be sure to spell out your assumptions clearly and explain all changes in all variables. Show what will happen in money-market and spot-FX-market graphs. a. The effect on e ($/pound) if Congress reduces taxes (ceteris paribus, i.e., all else remaining the same). b. The effect on the BOP (aka ORTB) under a fixed e if the Fed engages in a contractionary Monetary Policy, MP (cet. par.). What is meant by “sterilization” in this context?

Review the rubric to make sure you understand the criteria for earning your grade. Read the articles An Update on the Economy and Monetary Policy and Recent and Near-Term Fiscal Policy Write a five- to six-page paper answering the following regarding fiscal and monetary policy changes: Explain the key aspects of today’s monetary policy and how they are affecting GDP and aggregate demand/aggregate supply. Explain the key aspects of today’s fiscal policy and how they are affecting GDP and aggregate demand/aggregate supply. Are these policies being well coordinated today? In essence, are they both working in unison to address current economic conditions? Explain. What are these policies’ effects on aggregate supply and aggregate. Do understand they affect supply as well as demand. You must use a minimum of five sources for your research paper, at least three of which are scholarly. Use proper spelling, grammar, and APA formatting for your analysis paper. When you have completed your…

(a) Suppose that, in a liquidity trap, bank reserves are less liquid than government debt. If the central bank conducts an open market sale of government debt, what will be the effect on the price level? Use a diagram, explain your results. (b) Suppose that there is a decrease in the price of housing, which the central bank judges is a temporary asset price decrease. In the New Keynesian model, determine the central bank's optimal response to this asset price increase, using diagrams. (c) Suppose initially that inflation is at the central bank's target and the output gap is zero. Then, government spending goes up. Determine, with the aid of diagrams, how the degree of price stickiness affects the central bank's optimal response and explain your results.

The Board of Governors of the Federal Reserve is in charge of setting and overseeing monetary policy and is headed by the ___________(PRESIDENT OF THE BANK OF NEW YORK / CHAIRMAN OF THE FEDERAL RESERVE / SPEAKER OF THE HOUSE / PRESIDENT OF FEDERAL OP[EN MARKET COMMITTEE).    . Monetary policy is supposed to be____________(COORDINATED WITH/ INDEPENDENT OF)    Congress and the president. This goal is hindered by the fact that the chairman is_______________(APPOINTED BY THE PRESIDENT / PUBLICLY ELECTED).   Because Congress initially intended to create a decentralized banking system, there are also smaller branches of the Federal Reserve known as district banks. All presidents of the district banks take turns serving as members of the Federal Open Market Committee (FOMC) except for the president of the Federal Reserve Bank of __________(SAN FRANCISCO, NEW YORK, WASHINGTON DC), who is a permanent member.   NOTE- This is one question but divided into the parts please answer with an…

Which of the following supports the argument for hands-off policy? A. Monetary policy does not impact the economy. B. Fiscal policy does not impact the economy. C. Fine-tuning is not compatible with our design capabilities. D. The economy has been fairly stable since World War II.

If there is a decrease in inflation what happens to aggregate supply. Aggregate demand would shift downwards because it would fall but would supply be affected by this? With this shift in inflation and the decrease in demand what would policy makers do in response to this?

Suppose three economies are hit with the same temporary negative supply shock. In country A, inflationinitially rises and output falls; then inflation risesmore and output increases. In country B, inflationinitially rises and output falls; then both inflation andoutput fall. In country C, inflation initially rises andoutput falls; then inflation falls and output eventually increases. What type of stabilization approach dideach country take?

*Does monetary or fiscal policy have a longer time lag?  Why?

Use the given scenarios and the information you have learned about Fiscal and Monetary policy to complete the questions that follow The economy of Andorra is currently experiencing unemployment rates of 5% while economic growth is stagnating at 2%. Naomi recently lost her job as a systems analyst and is struggling to find new employment in the current economic conditions. Congress and the President also notice this change in the economy and decide to take steps to correct it. They can use their 2 tools in the following ways: a.      What will the federal government do to taxes?    b.     What will the federal government do to government spending? c.      What impact will this have on consumer spending?

Should Monetary and Fiscal Policymakers Try to Stabilize the Economy? Explain.