ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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- classical economists a. argued that money supply determined aggregate demand b. believed that the quantity of money influences interest rates and real wages c. regarded monetary policy as unimportant since quantity of money does not determine price level. d. that prices would increase more than proportionate to an increase in money supplyarrow_forwardAccording to Monetarists, what should the government do if unemployment is 4% and inflation is 12%? Select one: a. Decrease the supply of money b. Decrease government spending c. Raise taxes d. Do nothing e. Lower interest ratesarrow_forwardFederal Reserve is the central bank of the United States. She conducts monetary policy with various tools.a. Many central banks share similar policy objectives. What are the objectives of the Federal Reserve? b. Suppose the Federal Reserve announces a “loose” monetary policy.What has to be done, traditionally, with an open market operation? Explain with reference to the money creation processarrow_forward
- If the Bank of Canada wanted to reduce inflation, it could Select one: a. increase the reserve requirement or implement an open market sale. b. increase the reserve requirement or implement an open market purchase. c. decrease the reserve requirement or implement an open market purchase. d. decrease the reserve requirement or implement an open market sale.arrow_forwardpart Barrow_forwardWhat happens when a central bank pursues inflation targeting? A. The policy actions that central banks use to achieve the inflation target are kept secret. B. With inflation targeting, the United States would be more successful at achieving low and stable inflation. C. Many central banks achieve their inflation target at the expense of extremely high unemployment. D. The bank announces an explicit inflation target and the public is confident the bank's policy will achieve that target. thank you!!arrow_forward
- 1) https://www.econlowdown.org/resource-gallery/monetary_policy_tools 2) https://www.wsj.com/articles/zimbabwe-money-aa13a052?mod=hp_featst_pos5 3) https://news.sky.com/video/jamaican-bank-releases-reggae-song-on-inflation-12058864 please I need a short summary of these articles.arrow_forwarda. According to the Misperceptions theory, what would be the effect of an unanticipated monetary expansion shock on real interest rate (r), real output (Y), and price level (P) in the short and in the long-run? Why? Explain with details.b. Does your answer change if the shock is expected/anticipated? Why? Show how.arrow_forwardWhich of the following will most likely cause a change in the natural rate of unemployment? Select one: a. expansionary fiscal policy b. contractionary monetary policy c. contractionary monetary policy d. none of the other alternatives is correct e. expansionary monetary policy.arrow_forward
- b. Why do some people say that inflation is a tax? Who pays that tax? Who collects that tax? How does it work exactly? Does your answer depend on whether the world is best described by a general equilibrium (Classica economics) or disequilibrium (Keynesian)? c. Economists say that, in response to a wage rate increase, the overall labor supply may increase, decrease or remain unchained. Why aren't economists more certain about the consequences of something as simpl as a wage increase? d. The introduction of the ATM machine led to a period of price level increases. Why? Explain your answer intuitively. e. What is the "intertemporal labor substitution" effect (also known as the "Uber" effect)? Although you can use with a numerical example to illustrate your answer, make sure you explain it with words.arrow_forward1. What are the main reasons that the U.S. inflation surged last year? 2. What is the monetary policy the Fed (central bank of the U.S.) uses to control inflation? 3. How did the monetary policy cause the bankruptcy of Silicon Valley Bank?arrow_forwardhow inflation has caused monetary Policy to change and how? Would it be advantageous to borrow money if you expected prices to rise? Would you want a fixed-rate loan or one with an adjustable interest rate? a). List and explain the 3 tools of monetary policy discussed. Compare the rates before the pandemic, during the pandemic, and now.What tools are being used to reduce inflation? Compare all the monetary policy tools before and after inflation.arrow_forward
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