Why might policymakers be tempted to renege on an announcement they made earlier? In this situation, what is the advantage of a policy rule?

Q: Would you say central banks are more reactive than proactive?

A: Central bank is the supreme bank of the nation.

Q: If the central bank desired to increase spending in the economy, using the instruments ofmonetary…

A: Monetary policy is used by the federal reserves also known as the central bank of an economy to…

Q: Use a simple model to show that the control of inflation at a low level requires precommitment by…

A: Since the question you have posted consists of multiple parts, we will answer the first two parts…

Q: Who is in charge of fiscal and monetary policy, and how do each of these policies basically work?

A: Fiscal policy is the policy which is implemented by the government of the nation. Hence, charge of…

Q: True or false: Changes in monetary policy can affect output in the long run, but not in the short…

A: Monetary policy is a set of tools used by a country's central bank to encourage long-term economic…

Q: What happens when an economy was initially in full employment, following a strongly expansionary…

A: Answer: Full employment refers to the level of employment where output is maximum when all the…

Q: What evidence have you discovered that points to the Classical, Keynesian, and Monetarist theories…

A: Classical economics adopts flexible prices both in the matter of goods and wages. Classical…

Q: What is differance between Tools of monetary policy and fiscal policy?

A: Fiscal policy refers to the government policy that stabilizes the economy through bring changes in…

Q: Outline the model of monetary policy?

A: Monetary policy is a demand side economics which is generally run by central banks of any country.

Q: Why are Keynesians more likely to advocate expansionary monetary policy to eliminate a recessionary…

A: Recessionary gap means when the GDP of a nation is lower than the full employment level of GDP.…

Q: Which policy is more effective—monetary policy or fiscal policy? Why?

A: The monetary and fiscal policy, both are the way or process to balance the economic activities in an…

Q: Why is it helpful to model the policy process?

A: Policy refers to the action or a principle proposed by the directing or controlling authority to…

Q: Which of the following best describes an expansionary monetary policy? * a. less spending b.…

A: The best way to describe an expansionary monetary policy is the lower interest rate.  Lower interest…

Q: Why would most economists default usually first to monetary policy for stabilization before using…

A: An economy can be stabilized either by the government of the nation or by the central bank. A major…

Q: What is the main advantage and disadvantage of an unconditional policy commitment?

A: The unconditional policy commitment represents an un-spoken assurance by the central bank, which…

Q: Why might a price "freeze" help monetary policy to succeed.

A: An increase in the money supply is called a monetary expansion. In the short run when prices are…

Q: Why should monetary policy and fiscal policy be separately?

A: Fiscal policy: This is the government policy or tool by which it influences the country’s economy…

Q: Explain two reasons why policy makers might be tempted to renege on an announcement they made…

A: After defining a vision, policymakers are forced to adapt to reality. Reality frequently reveals…

Q: how would you describe the partisan model with regards to monetary policy

A: A partisan is a member of a political party or army who is fully committed to their cause. The…

Q: Explain the importance of timing when it comes to fiscal and monetary policy. Which has the…

A: The economies around the globe has various decision makers, and policy makers. The two major policy…

Q: What are the similarities between fiscal and monetary policies

A: Government implies both monetary as well as fiscal policy inorder to maintain the economic stability…

Q: What is monetary policy?

A: Monetary policy is the policy adopted by the central bank of a country to control the money supply…

Q: How can monetary policy address the problem of inflation?

A: Inflation refers to the increase in the price level in the economy. As the price level increases,…

Q: Which of the following is NOT a requirement in selecting a policy instrument?   Question 4 options:…

A: Policy instruments refer to a link between the formulation of policy and the implementation of…

Q: According to Keynesian economists, if people in the economy are not spending enough then the…

A: Keynesian the served the deserving value to the demand side of the economy when it comes influencing…

Q: Analyze monetary policy in order the generate macroeconomic stability

A: Introduction The central bank attempts to preserve price stability by limiting the amount of money…

Q: The Taylor Rule is an example of   a.  a monetary policy measure that always sets the money supply…

A: The Taylor rule is a formula targeting monetary policy used by central banks. According to Taylor, a…

Q: In what ways might monetary policy be superior to fiscal policy? In what ways might it be inferior?

A: Fiscal policy is a government tool that influence output, employment and prices in the economy. A…

Q: What are causes and effects of low policy rates

A: Causes of lower policy rates are:Supply and demandA decrease in the demand for credit will decrease…

Q: How is monetary policy linked with fiscal policy? Comment.

A: The monetary and fiscal policies are independent of one other but new challenges, in turn, call them…

Q: If a nation’s central bank, such as the US Federal reserve, believes the economy is headed toward a…

A: Meaning of Recession and Expansion: The term recession refers to the state under the business…

Q: Which of these is an alternative to monetary policy and aims to reduce inflation?

A: alternative to monetary policy is fiscal policy which is done by government of a country which…

Q: Can you show me a graphical representation of an IS-PC-MR model under the New Keynesian Philips…

A: In economics, macroeconomics refers to the study of the policies and fiscal measures which helps in…

Q: Analyze and compare fiscal and monetary policy in order the generate macroeconomic stability.

A: The policy that makes use of revenue that is collected and expenditures incurred by the government…

Q: Explain in detail how policy rate affects aggregate demand through a monetary transmission…

A: Policy rate means interest rate.Interest rate changes can affect aggregate demand through monetary…

Q: During the 2008-2011 financial crisis, two members of Congress proposed reinstituting the military…

A: The military draft was a system wherein all the citizens who are eligible were required to…

Q: What would monetary policy look like according to a 'policy mix'?

A: The economies around the globe work with the objective, and goals of increasing their economic…