PLEASE DO THEM CAREFULLY, ITS A HOMETAKE FINAL EXAM AND I REALLY NEEED THEM ALL
ID: 1206485 • Letter: P
Question
PLEASE DO THEM CAREFULLY, ITS A HOMETAKE FINAL EXAM AND I REALLY NEEED THEM ALL CORRECT. THANK YOU IN ADVANCE
55) Refer to Figure 15-7. Suppose the economy is in a recession and the Fed pursues an expansionary monetary policy. Using the static AD-AS model in the figure above, this would be depicted as a movement from
A) C to B.
B) A to E.
C) C to D.
D) A to B.
E) B to C.
56) Refer to Figure 15-7. Suppose the economy is in short-run equilibrium above potential GDP, the unemployment rate is very low, and wages and prices are rising. Using the static AD-AS model in the figure above, the correct Fed policy for this situation would be depicted as a movement from
A) B to C.
B) A to B.
C) C to D.
D) C to B.
E) A to E.
57) Refer to Figure 15-7. Suppose the Fed sells Treasury Bills in pursuit of contractionary monetary policy. Using the static AD-AS model in the figure above, this situation would be depicted as a movement from
A) B to D.
B) A to B.
C) C to B.
D) B to C.
E) C to D.
58) Which of the following describes what the Fed would do to pursue an expansionary monetary policy?
A) use open market operations to buy Treasury bills
B) use discount policy to raise the discount rate
C) use open market operations to sell Treasury bills
D) raise the reserve requirement
59) Contractionary monetary policy on the part of the Fed results in
A) an increase in the money supply, a decrease in interest rates, and an increase in GDP.
B) an increase in the money supply, an increase in interest rates, and an increase in GDP.
C) a decrease in the money supply, an increase in interest rates, and a decrease in GDP.
D) a decrease in the money supply, a decrease in interest rates, and a decrease in GDP.
60) Which of the following would most likely induce the Federal Reserve to conduct expansionary monetary policy? A significant decrease in
A) oil prices.
B) business taxes.
C) investment spending.
D) income tax rates.
Explanation / Answer
55)
D) A to B.
(As AD curve would shift from AD1 to AD2)
56)
D) C to B.
(As AD curve would shift from AD3 to AD2 because of contractionary monetary policy)
57)
C) C to B.
(As AD curve would shift from AD3 to AD2)
58)
A) Use open market operations to buy Treasury bills
(OMO to buy treasury bills in exchange for currency will increase currency supply in the economy)
59) Contractionary monetary policy on the part of the Fed results in
C) a decrease in the money supply, an increase in interest rates, and a decrease in GDP.
(As AD curve shift to the left)
60)
C) Investment spending
(As a fall in investment spending will decrease AD and output, and thus Fed would be required to intervene and adopt expansionary policy)
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