Question 16 (1 point) which type of policy would the Federal Reserve engage in i

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Question 16 (1 point)

which type of policy would the Federal Reserve engage in if they observe high levels of unemployment?

Question 16 options:

lowering taxes

purchasing bonds

selling bonds

increasing government spending

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Question 17 (1 point)

When a central bank buys the bonds of its government to pay for expenditures, it is said to _____ the debt.

Question 17 options:

monetize

dollarize

currency cover

none of the above

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Question 18 (1 point)

The lag for monetary policymakers obtaining information about unemployment is called

Question 18 options:

data lag.

legislative lag.

implementation lag.

recognition lag.

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Question 19 (1 point)

If the federal reserve is engaging in a contractionary monetary policy what signals to the federal reserve to engage in this policy

Question 19 options:

high unemployment

stagnant energy prices

high levels of inflation

increased inventory levels

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Question 20 (1 point)

Who said lags for monetary policy are "long and variable?"

Question 20 options:

Robert Wright

Ben Bernanke

Milton Friedman

Alan Greenspan

lowering taxes

purchasing bonds

selling bonds

increasing government spending

Explanation / Answer

16. As we all know an expansionary monetary policy is used to increase the economic growth rate and decrease the unemployment rate by increasing inflation. Here in this case Federal Resersve can impliment expansionary polic by purchasing bonds. An expansionary monetary policy will increase the money supply in the economy, which can be done by selling government to the public to generate more money in the system.

17. When a central bank buys the bonds of its government to pay for expenditures, it is said to monetize the debt. As we know monetization means converting something into some legal tender.Here in this case government monetize the debts.

18. The lag for monetary policymakers obtaining information about unemployment is called data lag. Because many macroeconomic data series is available under this lag.For other lag, we can say from there defination that this 3 lags are not related to macroeconomic data sets.This are related to various shockes.

19. If the federal reserve is engaging in a contractionary monetary policy signals high levels of inflation. Because contactionary monetary policy wiill decrease in supply of money, in this way Federal Reserve combat the high rate of inflation.

20. Milton Friedman said lags for monetary policy are "long and variable". There is no such concept regarding this.

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