Question

1. Which of the following is not a goal of monetary policy? A. High employment B....

1. Which of the following is not a goal of monetary policy?

A. High employment B. Economic growth C. Low inflation D. An unemployment rate as close to zero as possible

2. What is the primary long run goal of monetary policy?

A. Price stability B. Economic growth C. Low unemployment D. A stable dollar

3. The most important characteristic of a policy(operating) instrument Is that it

A. Is observable and measurable B. Is controllable C. Has a predictable impact on goals D. Is a nominal anchor

4.Which of the following is a policy( operating) instrument?

A. Open market operations B. Fed funds rate C. Inflation D. Discount rate

5. The purpose of the Taylor rule was to

A. Prevent inflation B. Forecast interest rates C. Establish the Fed Funds Rate D. Guide which long run goal to use

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

1.  D. An unemployment rate as close to zero as possible

reason- Unemployment rate close to zero is not possible because of frictional unemployment and structural unemployment.

Unemployment rate will be equal to natural rate of unemployment.

Answer 2. a. A price stability

reason- Monetary policy primary goal is to maintain the price level or inflation in the market.

Answer 3. C. Has a predictable impact on goals

reason- The most important characteristic is of a policy instrument is to be able to predict the impact on goals.

Answer 4. a. open market operations

reason- Open market operations is a policy instrument that helps control money supply.

Answer 5. forecast interest rate

reason- The purpose of taylor rule is to forecast interest rate.

it was invented by John Taylor in 1992.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Answer These Questions answer the following questions: The primary way the Fed conducts monetary policy is...
Answer These Questions answer the following questions: The primary way the Fed conducts monetary policy is through which tool? Why does the Fed watch both inflation and unemployment? Is the Fed’s goal to reach an unemployment rate of zero? Explain Is the Fed’s goal to reach zero inflation? Explain How do changes in the fed funds rate affect the economy? How long before changes in the fed funds rate affect the economy? How much does the Fed change the fed...
31.Which of  the following is a policy( operating) instrument?     A. Open market operations   B. Fed funds rate...
31.Which of  the following is a policy( operating) instrument?     A. Open market operations   B. Fed funds rate   C. Inflation           D. Discount rate
Which of the following is NOT an alternative rule for monetary? policy? A. a natural unemployment...
Which of the following is NOT an alternative rule for monetary? policy? A. a natural unemployment rate targeting rule B. an inflation rate targeting rule C. a money targeting rule D. a gold price targeting rule E. a monetary base instrument rule
17. The Taylor Rule is a type of discretionary policy. an activist policy that suggests a...
17. The Taylor Rule is a type of discretionary policy. an activist policy that suggests a target for the Federal Funds rate based on economic conditions. an activist policy that suggests a target for the inflation rate based on economic conditions. a non-activist rule that suggests a constant rate of money growth regardless of economic conditions. 18. Over short periods of time, A. real GDP growth is stable. B. velocity of money is stable. C. growth in velocity is volitile....
21. the increase in excess reserves that occured as a result of the mortgage debt crisis...
21. the increase in excess reserves that occured as a result of the mortgage debt crisis a. was offset by restrictive monetary policy b. rendered open-market operations ineffective. c. caused the Fed to set a negative nominal interest rate target for the federal funds rate. d. prevented the Fed from taking any further action to increase the money supply 22. What does it mean economists say that the Fed has attempted to "normalize" monetary policy after the Great Recession? a....
Which of the following is a potential monetary policy instrument for the Fed? setting corporate profit...
Which of the following is a potential monetary policy instrument for the Fed? setting corporate profit rates setting the inflation rate setting mortgage interest rate setting the discount rate
Which of the following is not an "intermediate" target used by the Fed in implementing monetary...
Which of the following is not an "intermediate" target used by the Fed in implementing monetary policy (a) gold prices (b) real long term interest rates (c) growth in consumer debt (d) federal funds rate
Suppose the Federal Reserve pursues contractionary monetary policy. In the long run a. both inflation and...
Suppose the Federal Reserve pursues contractionary monetary policy. In the long run a. both inflation and the unemployment rate are higher than they were prior to the change in policy. b. inflation is higher and the unemployment rate is the same as it was prior to the change in policy. c. inflation is lower and the unemployment rate is lower than it was prior to the change in policy. d. inflation is lower and unemployment is the same as it...
In which of the following cases will expansionary monetary policy be more effective at pulling an...
In which of the following cases will expansionary monetary policy be more effective at pulling an economy out of recession? Assume that the monetary expansion will result in a 5% inflation rate. Choose one or more: A. In the past, the inflation rate has always climbed to around 6% following an expansionary monetary policy. B. The Fed publicly announces that the monetary policy will result in a 5% inflation rate. C. People consistently expect a 0% inflation rate. D. Inflation...
6) Let’s try to understand the long-run and short-run implications of monetary policy issues. Let’s assume...
6) Let’s try to understand the long-run and short-run implications of monetary policy issues. Let’s assume inflation is currently 2% and that monetary policy has an inflation targeting rule that makes desired (targeted) inflation also 2%. Finally, suppose the equilibrium real interest rate in the economy is 1% and that “beta” in the Phillips curve is 1.2. a) In the long-run, the output gap should be 0% and there should be no shocks to inflation. In that situation what will...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT