Question

a. Monetary Policy involves changing taxes and government spending/ the design of currency/ exports/ the money...

a. Monetary Policy involves changing taxes and government spending/ the design of currency/ exports/ the money supply.   In the United States, Monetary Policy is implemented by the Federal Reserve/ President and Congress/ Secretary of the Treasury/ states.

b. Contractionary Monetary Policy/ Lower prices/ Expansionary MonetaryPolicy/ Larger coins can be used to address a Recessionary Gap; while Expansionary MonetaryPolicy/ smaller coins/ Contractionary Monetary Policy/ higher prices can be used to address an Inflationary Gap.

c.  To enact Contractionary Monetary Policy, the central bank will buy/ sell bonds. This increase/decrease the amount of cash in the economy. This will cause bond prices to fall/ stay the same/ rise,  and interest rates to fall/ stay the same/ rise. The change in interest rates causes investment and consumption to fall/ stay the same/ rise, shifting Short-Run Aggregate Supply/ Aggregate Demand/ Long-Run Aggregate Supply (outwards/ inwards).

d.  To enact Expansionary Monetary Policy, the central bank will buy/ sell bonds. This increase/decrease the amount of cash in the economy. This will cause bond prices to fall/ stay the same/ rise,  and interest rates to fall/ stay the same/ rise. The change in interest rates causes investment and consumption to fall/ stay the same/ rise, shifting Short-Run Aggregate Supply/ Aggregate Demand/ Long-Run Aggregate Supply (outwards/ inwards).

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Answer #1

a) the money supply; the Federal Reserve

Monetary policy is related to change in money supply and it is implemented by the Federal Reserve.

b) Expansionary MonetaryPolicy; Contractionary Monetary Policy

c) Sell; decrease; fall; rise; fall; Aggregate demand inwards.

There is inverse relation between bond price and interest rate. Buying of government securities increases money supply while selling of securities decrea

d) Buy; increase; rise; fall; rise; Aggregate demand outwards.

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