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- (c) Monetory policy authorities will respond to the change in price level that occurred in part (b). How might the central bank respond to the change you described in part (b)? (d) Draw a correctly labeled graph of the money market. a. Label the equilibrium interest rate. b. Show on your graph the change in money supply that will occur due to the monetary policy described in part (c). c. Show on your graph the change in interest rates that will occur due to the monetary policy described in part (c). (e) At the same time, assume that policymakers at the Bank of England enforce an expansionary monetary policy.4. According to Monetary neutrality and classical macroeconomics, the increase in money supply ________________________ (a) Increase the GDP deflator (b) decrease the GDP deflator (c) Increase real GDP (d) decrease real GDP (e) both GDP deflator and real GDP do not changeBUSN5 CH2 WKSMultiple ChoiceIdentify the choice that best completes the statement or answers the question.1. Define economics.a) a financial and social systemb) the study of a countryâs overall economic issuesc) the integration between consumers, families, and businessesd) the study of the choices that different entities make in allocating resources2. Macroeconomics focuses ona) the major issues facing the national economy, but has little or no relevance to individuals.b) smaller economic units such as individual consumers, families, and individual businesses operating within the economy.c) the major issues facing the national economy that may seem abstract, but directly affect an individualâs day-to-day life. d) the role of government, while microeconomics focuses on the private sector.3. After the collapse of the dot com bubble and the 9/11 terrorist attacks, the stock market depreciated and unemployment increased leading many to fear that the…
- 28) When the Fed raises the federal funds rate A) the value of the dollar rises on the foreign exchange market. B) consumption increases. C) net exports increase. D) the value of the dollar falls on the foreign exchange market. 29) An inflation rate targeting rule A) reduces uncertainty about monetary policy. B) means that the inflation rate must exceed 5 percent in order for the rule to be effective. C) has 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.5 1) Explain the logic of Modern Monetary Theory.17. Which of the following sequence of events follows an expansionary monetary policy? interest rate(up)----consumption & investment(up)----Aggregate demand(down)----real GDP(up) 2. interest rate(down)---consumption & investment(down)----Aggregate demand(up)----real GDP(down) 3. interest rate(up)----consumption & investment(down)----Aggregate demand(down)----real GDP(down) 4. interest rate(down)---consumption & investment(up)-----Aggregate demand(up)-----real GDP(up)
- The Federal Reserve is responsible for managing the U.S. money supply. A.) List and thoroughly explain 6 of the functions of the Federal Reserve System. Be specific. b.)Please thoroughly and completely explain how money is created and destroyed. c.) Please thoroughly and completely explain how the 3 tools of monetary policy would work to address the problem of recession. Include the impact of those tools on the key economic variables. Specifically, I want you to explain how each of the 3 tools would work using the chain of events approach.1) when the fed realises that inflation is going up at an unstable rate for the economy , which of the following are they most likely do ? (a) print more money (b) increase the discount rate (c) lover the reserve ratio2. Assume the Fed conducts open-market operations, buying $2000 of bonds (securities) directly from individuals. The required reserve ratio is 10%. (a) Draw this on your answer sheet. Then, modify the bank balance sheet so that it reflects the changes... Assets Liabilities Total reserves Deposits $10,000 $100,000 Securities (bonds) $10,000 Loans $80,000 (b) As a result of the open market operation, what are the excess reserves now? (c) Calculate the money multiplier. Show your work. (d) Calculate the maximum potential change in money supply as a result of the Fed action. Show your work.
- (a) Given that: Total deposit as of August 2021 in Indonesia = USD 621.2 Billion Total currency in circulation as of August 2021 = USD 93.2 Billion Reserve required as of August 2021 = 2% Total Excess Reserve as of August 2021 = USD 53.2 million From the above information: (i) Calculate the monetary base (ii) Calculate the money multiplier. What will be the total money supply? (iii) Suppose that the Indonesia Central Bank targeted money supply to grow by 3% next year. Suggest any ONE (1) way to achieved the targeted money supply.)The central bank of your assigned Caribbean country decides to pursue anexpansionary monetary policy.(i) Identify one possible action they could take. (ii) Carefully explain, in as much detail as possible, how the chosen action will impact the money market. (iii) Illustrate the overall impact of the chosen action on the money market.(iv) Identify a newspaper article in your assigned Caribbean country thatprovides a situation in which an expansionary monetary policy wasimplemented by the central bank. Ensure that you provide a screenshot of the article in your submission.11. Federal Reserve independence is thought to Question 11 options: a) help Congress to better coordinate monetary and fiscal policy. b) introduce longer-run considerations to monetary policymaking. c) give the President and Congress more influence over monetary policy. d) introduce a short-term inflationary bias to monetary policymaking.