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Q: on is D(x) = 60 - 0.45x and the supply equation is S(x) = 0.15x+17, find the equilibrium price.
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Q)Explain when would the Fed want to carry out a
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- 7-) If the money demand function is unstable and undergoes substantial, unpredictable changes, then the level of interest rates set by the central banks will provide more information about the stance of monetary policythan will the money supply. Is this statement true, false, or uncertain? Explain your answer. (ANSWERS that only state “True”, “False”, “Uncertain”)1.Monetary equilibrium occurs when theQuestion options: A) supply and demand for all goods in the economy are equal at the current rate of interest. B) existing supply of money is willingly held by households and firms in the economy at the current rate of interest. C) growth in the money supply is zero. D) the money supply is growing at a constant rate. E) nominal rate of interest equals the real rate of interest. 2.The economy starts in long-run equilibrium. After an initial shock, and the subsequent adjustment process, the economy ends up at a point with a higher price level and the initial level of real GDP. Which of the following initial shocks would explain this?Question options: a) An increase in desired savings. b) An increase in government transfer payments. c) An appreciation of the Canadian dollar. d) An improvement in production technology. e) An increase in the cost of factor inputs. 3.The economy starts in long-run equilibrium. After an initial shock, and the subsequent…Diop, Mame esign Layout References Mailings Review View Help 14.) 2020 was year the COVID-19 global pandemic. Specifically explain how both monetary and fiscal policy have been used in the United States as a reaction to date.
- Price stability: Suppose you are the head of the central bank and your mandateis to maintain the price level at a constant value. Explain what you would doto the money supply in response to each of the following events:(a) Real GDP increases by 4% during a boom.(b) Real GDP declines by 1% during a recession.(c) Real GDP is growing at 3% per year.(d) Te velocity of money increases by 2%.(e) Te velocity of money declines by 1%.If a central bank buys government securities from the private sector-money markets,leading to an expansion of the money supply, other things being equal, what would theeffect be on the following?(d) Aggregate Supply(e) Aggregate Demand(f) Economic activity(g) Price level of the economy can you help giving me these 4 ans.Explain the balance sheet channel of monetary policy influencing risk externalities as a theory for monetary transmission mechanism. - How does this describe the non-neutrality of money? - make a sketch/outline of the theory. - How does this channel connect to other non-neutrality theorie s?
- 9) Explain why inflation may tend to accelerate.29) An inflation rate targeting rule A) reduces uncertainty about monetary policy. means that the inflation rate must exceed 5 percent in order for the rule to be effective. nas been adopted the by the Fed in response to the financial crisis of 2008-2009. D) will not work if the Fed continues to sue open market operations. 30) "As the Fed Chases Inflation, Critics Shout, 'Faster!" "For weeks, the Fed has broadcast its intention to raise interest rates glacially." The Fed was moving slowly, according to an economist because "..the declining price of oil, economic fundamentals, including productivity and global competition, will keep inflation in check." The Fed, recognizing that the economy was improving stated it planned to "respond to changes in economic prospects as needed to fulfill its obligation to maintain price stability." Other economists disagree with the Fed's restrained policy as a "mistake." www.nytimes, 7/1/2004 Economists estimate that if the Fed's policy was enacted in…You are employed at an Economics consulting firm called Eco Xcel. You have been approached bya client who read the article below entitled, “Another big hike raises South African interest ratesnear pre-Covid levels” and who has very limited understanding of monetary policy and how itworks. He has asked you to write a report that provides some clarity on Monetary Policy in thecontext of the South African economy. JOHANNESBURG (Reuters) -South Africa’s central bank delivered another big interest rate hike onThursday, taking its main lending rate back near pre-COVID levels as it battles to bring inflationback to target.The South African Reserve Bank (SARB) raised its repurchase rate by 75 basis points (bps) to6.25%, in line with the forecast of the majority of economists polled by Reuters. The rand pared gains against the U.S. dollar after the decision was announced, as some tradershad positioned for a larger hike.The SARB has now raised rates for the sixth time in a row, adding a total of…
- Question 4Suppose a country’s inflation level is higher than desired, and unemployment levels arelower than expected – the central bank decides that the economy is ‘overheated’ andattempts to use the appropriate monetary policy to deal with the situation. Describe,with the help of the appropriate figure, how a central bank might go about implementingsuch monetary policy, the subsequent effects this has on interest rates, the quantity ofmoney in the market, and the process through which this affects the level of expenditurein the economy.1. Which of the following is concerned with changing the aggregate demand of thenation?A) External balanceB) Internal balanceC) Expenditure-changing policiesD) Expenditure-switching policiesAnswer: 2. Which of the following is an example of an expansionary monetary policy?A) Increase in TaxesB) Increase in the nation's money supplyC)Increased government expendituresD) Reduction in taxesAnswer:23. Which of the following is not a way that the United States government attempts to control the growth of the American economy and control for inflation? A. by changing reserve requirements B. by raising national debt C. by changing interest rates D. by changing money supply
