(Refer to Quizlet Guide Picture #2), What are Bank Uno's reserves in Table 2? If two firms were initially competing in a Cournot oligopoly and then try to collude to maximize joint profits, what is the profit that firm 1 would actually get, given its best response function, assuming that firm 2 is producing the colluding quantity? Which phrase best defines the term lobbyist? Which is true about actual economic output during different times of the business cycle? Which of the following statements best descrbes the impact of this event on the stock market? Contractionary monetary . True or False: True or False: At the point which equals the Real GDP of Q2 and the Price Level of P2. Phil Frugal has been saving his pennies since he was five years old. Increasing individual tax rates through fiscal policy will most likely have which effect on the economy? That's when prices rise too fast in clothing, food, and other necessities. Which policy perspective sees foreign affairs as a network of connected interests that can be best influenced by diplomacy? Securities and Exchange Commission According to the permanent income hypothesis, which situations would result in an immediate increase in consumer spending, which would result in an immediate decrease in consumer spending, and which would result in no change in consumer spending? Which risk do they run each day at One advantage of polymer banknotes is that they dramatically reduce counterfeiting. Phil Frugal has been saving his pennies since he was five years old. It includes currency in circulation, checking account deposits and travelers checks. It takes time to collect data and many economic reports are not totally current. Refer to the following figure to answer the questions that follow. Most often, the prices that are inflexible are: Which of the following best describes how expansionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model? High levels of government debt can accrue. 2003-2023 Chegg Inc. All rights reserved. In 1988, Australia introduced a commemorative $10 banknote made of plastic (polymer). What is the major problem with expansionary gaps? Monetary policy refers to the government's choices regarding purchases or taxation. [Solved] 1) We all see how several firms are outsourcing their Which statement about executive orders is accurate? M1 is the narrowest definition of the money supply. Select the proper policy recommendation or economic prediction for each of the following scenarios. True or False: In 2007, the Federal Reserve lowered interest rates in order to stimulate the economy. a. The economy, therefore, cannot be stimulated beyond this point. decreasing reserves to increase interest rates, Which of the given statements is the most direct result of the correct monetary policy from the first question? provides a larger incentive for firms to invest. (Refer to Quizlet Guide Picture #1), What are the bank's reserves in Table 2? c. Section 11(c) of the OSH Act. The reserve requirement is the proportion of its deposits that a bank must keep on hand and not use to create money through making loans to borrowers. Change in interest rate impacts the investment spending. inflation is kept in check in the long run by keeping the growth of M1 and M2 on a steady path. Suppose that you are employed as an advisor to the central bank. - Distributes coin and currency When the economy is growing too slowly (recession) or too quickly (high inflation), the two approaches the government can use, according to economists, include which of the following? (Econ) Mod 3 Note Guide.docx - The National Economy and You Dianne buys stock in Starbucks. The bank will raise interest rates to make lending more expensive. Which of the following best describes the sequence of events in the conduct of contractionary monetary policy using open market operations (in an economy with low inflation and a stable banking system)? Limitations of Monetary Policy | CFA Level 1 - AnalystPrep - Banks decide to keep some excess reserves on hand. The economy's long-run potential, or what economists call full employment. The state of the economy can affect the amount of excess reserves that banks keep on reserve, thereby affecting the impact of the money multiplier. Contractionary monetary policy is a strategy used by a nation's central bank during booming growth periods to slow down the economy and control rising inflation. Researchers announce that they anticipate a breakthrough in the effectiveness of training for low-skills workers within the next decade. The crisis in (5) ________ began much as it did in the U.S., when a housing bubble burst. Which sentence describes how the records of government agencies are often used? (4) ________ was unable to cut the gov. Which of the following is true regarding capitalism and communism? Required reserves and leakages amount to 33% of deposits. Contractionary fiscal policy features an increase in taxation and/or a decrease in spending in order to attempt to keep prices from rising too quickly. When supply shifts cause a downturn in the economy: monetary policy is much less likely to restore the economy to its pre-recession conditions. Johnson was directly influenced by New Deal thinking. 5. Government _regulation_ helps prevent periods of extreme _waves of growth__ and __declines_____. Which of the following statements best describes monetary policy during the Great Recession? Which earlier social engineering program directly influenced Johnson's initiatives? What is the value of this expansionary gap? Assume of 8% reserve requirement in the U.S. and that Bank of America account holds no excess reserves: Suppose we start with a state of general equilibrium in which the government implements a contractionary monetary policy (reduces the money supply). How should fiscal policy be used in an inflationary economy? 1 See answer Advertisement cainlee401 The Correct Anser Would Be "A" E. Money is not the only possible store of . securities, which results in a $2000 billion decrease in the money supply. Which of the following can change relatively quickly in the short run? What are Assume a required reserve ratio of 10%. Correct Answer: $900 Question 12 A decrease in the discount rate would: Correct Answer: increase bank borrowing of reserves and reflect an expansionary monetary policy. Your are Chair of the Federal Reserve Board. 2012 3% Which of the following explains expansionary monetary policy in the long run? Since then, 40 countries around the world have begun using some form of polymer banknotes. - A reduction in the occurrences of rampant inflation, Suppose that you are employed as an advisor to the central bank. 120 seconds. Banks in Ruritania have a required reserve ratio of 5%. In (3) _______, the newest member of the Eurozone, politicians have a great deal of control over the banking industry. Monetary policy is under the control of this agency. Sophia Macroeconomics Unit 4 Challenge 1.docx - 1 If the economy is suffering from extremely high rates of inflation, how should the government intervene from the standpoint of a classical economist? 1. Contractionary fiscal policy is used to offset which of the following? Under normal economic conditions, including the situation in which there is no surprise inflation, we expect the unemployment rate to: be equal to the natural rate of unemployment. (#121), decreases in investment and a slowing of output growth. What is the first step toward becoming a U.S. Supreme Court judge, according to Article III of the Constitution? Which of these represents the federal government's first intervention in how U.S. businesses operate? monetary policy affects the aggregate demand curve in the aggregate Suppose that the Fed engages in an expansionary monetary policy, which reduces interest rates. B. Cost-push inflation is described as too much money chasing too few goods.. - The central bank increases the required reserve ratio. Expert Answer Question 8 Monetary policy generally impacts interest rates. True or False: It decreases the ability of brokers to trade stocks. - Engaging in monetary policy, Classify each of the tasks according to whether or not they are tasks of the Federal Reserve. What is the maximum possible increase in the money supply as a result of your bank account? Significant revisions to quarterly GDP data and monthly unemployment data delay the identifications of the start of a recession. True or False: Increasing government spending will likely lead to all of the following, EXCEPT: How would a government most likely change its tax rates during a recession? His pennies total $5000. - Some loan recipients choose to hold some cash instead of depositing all of it in banks. In a monetary economy there always has to be a double coincidence of wants. A. Demand-pull inflation creates a situation known as stagflation. 1. Macroeconomics: Exam 3 (CRUNCH TIME) Flashcards | Quizlet (Refer to Quizlet Guide Picture #1), What are Bank Uno's deposits in Table 2? Holding all else constant, in the short run, an increase in the money supply can cause: Refer to the following figure to answer the questions that follow. It's also called a restrictive monetary policy because it restricts liquidity. Because either there is life on Mars or there is not, the probability of life on Mars is 0.50.50.5. the right. Which diplomatic tool is often used to follow up on an initial agreement? provides a lesser incentive for firms to invest. It offered tuition-free education, help with household expenses, and loans for starting new businesses. Using Table 37.1 and your knowledge of macroeconomics, identify the views on macro theory and policy you would want your appointees to hold. The objective behind controlling the money supply is to achieve a targeted inflation rate. What is the term for this? The amount of time it takes for a policy to be implemented. What does the Tenth Amendment have to do with American federalism? Docx 5 - Ghfh - Module 4 This module covers Answers to chapters 13 Which phrase best defines the term policy? - What is the simple money (deposit) multiplier? Which of the following is a possible explanation as to why this policy failed to restore the economy to long- run equilibrium. Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Don Herrmann, J. David Spiceland, Wayne Thomas, Chapter 10-Climate Change, Public Health and. Which statement best describes what will most likely happen, from an economic . True or False: 1. - The ability to influence unemployment rates in the economy. Label the scenarios with the type of monetary policy lag represented in each. According to supply-side economists, how are taxes and economic growth related? e. Contractionary monetary policy directly pulls money out of - The amount a bank has on hand fulfill the cash demands of its customers and the reserve requirements of the Fed. Keynesian (intervene) and Classical (do nothing) Which of the following statements best describes the use of fiscal policy during a recession? She quickly walks to checkout line where she pays the cashier for her new dress. the maximum amount by which the U.S. money supply can grow as a result of the family deposit. 3. Bill of 1944? Monetary Policy Questions and Answers | Homework.Study.com someone who tries to influence the government in an organized way. A planned increase in the budget deficit. What was Nixon's argument for not turning over the Watergate tapes? Q. loanable funds market. Suppose that the required reserve ratio is 6.00%. The following table describes the aggregate demand curve, where real GDP is expressed as the percent deviation from potential GDP and inflation is expressed as a percentage: Real GDP 2.0 1.0 0.0 -1.0 -2.0 Inflation 0.0 X % 3.0 4.0 5.0 7.0 9.0 Due to a price shock, inflation increases by 2%. Check out a sample Q&A here See Solution star_border Students who've seen this question also like: The Keynesian model can be used to study the impact of changes in monetary policy. What is the amount that Robina Bank must keep on hand as required by the Federal Reserve (Fed)? - An important policy tool for stabilizing fluctuations in the business cycle Which of the following best describes a monetary policy tool? a The AD-AS model can be used to study the impact of changes in the general level of wages on production, income, empl . - The ability to attract foreign direct investment Once the Federal Reserve lowers interest rates, businesses and consumers are slow to increase borrowing as a result. (Refer to Quizlet Guide Picture # ) The equation of exchange, M x V = P x Q, relates to the quantity theory of money. 2. What is the leakage-adjusted money multiplier? 30 seconds . Norah walks into her own department store, Bullseye, to pick out a new dress. Increase government spending and decrease taxes. Since Estrovia has inflation rate of 9% as compared with average of 4%, her central bank should implement a contractionary monetary policy to lower the inflation rate, otherwise the economy will heat up and hit a severe recession. The law is removed and replaced with another law. Reserves = ? Change ($) = ? loanable funds market. The economy is producing at a real GDP greater than the LRAS. Which panel in the figure below best describes the situation in each of (a)-(d)? Solved Numbers and Graphs: Monetary Policy (Ch 15) LRAS - Chegg a. The Federal Reserve generally uses ___________________ to implement monetary policy. - The equilibrium interest rate, What are the results of a contractionary monetary policy, which intends to slow down the economy, and what are not? Experts are tested by Chegg as specialists in their subject area. a. Calc. ensuring that laws do not violate the Constitution. _____ fiscal policy addresses a _____ economy, while _____ fiscal policy addresses an _____ economy. True or False: 4. increase 3. - Price level, Suppose that a central bank pursues expansionary monetary policy by purchasing bonds. (round to one decimal place) A decrease in a country's total imports is most likely caused by: answer choices. - The central bank increases the money supply. the left. A company has been running an assembly line with 97.42%%97.42 \% \%97.42%% of the products made is acceptable. Which of the following is an example of contractionary monetary policy Which public health and safety agency would be most likely to investigate the safety of a new over-the-counter medicine? If the supply of money decreases, what happens in the money market? -to protect constitutional rights, safety, and fairness -to ensure that property rights are protected This lowers the interest rate, which Which statement best defines the permanent income hypothesis? risk? Many studies have examined the data on inflation and The Federal Reserve was created by the Federal Reserve Act of 1913. Beginning in January, a person plans to deposit $100\$ 100$100 at the end of each month into an account earning 6%6 \%6% compounded monthly. Which of the following statements best describes the use of fiscal policy during a recession? Which of the following best describes the effect on the SRAS curve if political negotiations result in a substantial decrease in the price of oil? 2010 0% (round to one decimal place) Match each policy with the graph showing the corresponding shift. Bitcoins Excess Reserves = ? the military Which phrase best describes the economy of the former Soviet Union and present-day North Korea? Question 13 A system where goods and services are exchanged directly without a common unit of account is called the: Correct Answer: barter system. - Reduces the money supply, Is a result of a contractionary monetary policy (tight money policy), What are the results of a contractionary monetary policy, which intends to slow down the economy, and what are not? Monetary policy is the domain of the U.S. Federal . school about their attitudes toward risk. Which of the following is a tool that the U.S. president can use on his or her own to affect foreign policy? Contractionary policies are implemented during the expansionary phase of a business cycle to slow down. When the Fed adjusts its interest rate, it directly influences consumer saving. Assume a required reserve ratio of 10%. He is now 45 and deposits his savings into a bank. the right. Executive privilege allowed him to withhold them. A. Gross pay of $1,298 and$1,060. What essential characteristic of money does fresh fish lack that most makes it ineffective? True or False: You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Which policy is appropriate when a rising aggregate price level is a concern and GDP is not growing at an acceptable rate? (Refer to Quizlet Guide Picture #2). the right. It increases federal spending on infrastructure. Bill, provided financial assistance to soldiers returning from World War II. - Reserves are the funds banks keep on hand to meet Federal Reserve requirements. Because banks are in the business of lending money, they will ____ so savers don't need to. What to expect from the RBA meeting in March 2023 d. The General Duty Clause. What is the best and quickest way to find out the purpose of specific government agency? Answered: Consider the two examples of labour | bartleby Consumer spending depends on both the income and wealth of people in the economy. They help offset declines in aggregate demand during recessions. What system is applied to calculate the timing of revenue and expense recognition? Literally trading one good for another without using money, A situation where two individuals each want some good or service that the other can provide, Whatever serves society in three functions: medium of exchange, store of value, and unit of account, Are these an example of commodity money or or fiat money: Compile your fi ndings, and share One where high-income people are taxed at a higher rate. Which step in the rule-making process makes the new regulations available to the public for review? A monetary policy that lowers interest rates and stimulates borrowing is known as an expansionary monetary policy or loose monetary policy. The Federal Reserve, which maintains reserve banks across the United States, is responsible for monetary policy. - The Federal Reserve purchases bonds on the open market borrowing. the decision to increase the budget will depend on whether members are using the indoor facility at least two times a week. When the nominal interest rate is rising the real interest rate is necessarily rising: when the nominal interest rate is falling, the real interest rate is necessarily falling.