Question

17. The government implements monetary policy and fiscal policy in order to: a. offset the shifts...

17.

The government implements monetary policy and fiscal policy in order to:

a. offset the shifts in aggregate demand and thereby eliminate unemployment.

b. offset shifts in aggregate demand and thereby stabilize the economy.

c. enhance the shifts in aggregate demand and thereby create fluctuations in output and employment.

d. enhance the shifts in aggregate demand and thereby increase economic growth

20.

Which of the following is a way the Fed can change the money supply?

a. changing how much it lends to banks.

b. changing the interest rate it pays banks on the reserves they are holding.

c. using open-market operations.

d. All of the above are correct.

23.

If the multiplier is 10, then the MPC is

0.16.

0.9.

0.10.

0.86.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

17) the aim of fiscal policy and monetary policy economic stability and not economic growth. Changes in fiscal policy and monetary policy are brought about in order to maintain price stability and full employment and to handle any shock to the economy. Select option B

20) option D is correct. These are basically the tools of monetary policy and the are used in order to change the money supply. for example in the open market government securities are bought and sold in order to influence the amount of reserves in the banking system

21) 0.9. when marginal propensity to consume is 0.9 then marginal propensity to save will be 1 - 0.9 which is 0.1. multiplier is 1 / MPS so multiplier will be 1/ 0.1 or 10.

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
1) If the stock market crashes, then aggregate demand increases, which the Fed could offset by...
1) If the stock market crashes, then aggregate demand increases, which the Fed could offset by increasing the money supply. aggregate demand increases, which the Fed could offset by decreasing the money supply. aggregate demand decreases, which the Fed could offset by increasing the money supply. aggregate demand decreases, which the Fed could offset by decreasing the money supply. 2) In order to avoid entering a recession, the government of Batavia spent $300 billion improving infrastructure around the country. Assuming...
1. ________ fiscal and monetary policy will make AD shift to the left A. contractionary B....
1. ________ fiscal and monetary policy will make AD shift to the left A. contractionary B. expansioanry C. expansioanry and contractionary D. None of the other alternatives are correct 2. If banks keep excess reserve that will _____ the money multiplier A. reduce B. expand C. higher D. None of the other alternatives are correct 3. Demand lead recessions shift AD ____ and the economy shifts to a ______ run equilibrium A. left, short B. right, long C. left, full...
1. The Federal Reserve Act says that the Fed must try to achieve​ ______. A. a...
1. The Federal Reserve Act says that the Fed must try to achieve​ ______. A. a balanced budget B. maximum​ employment, stable​ prices, and moderate​ long-term interest rates C. a stable U.S. dollar on foreign exchange markets and moderate​ long-term and​ short-term interest rates D. an economic environment in which investment in U.S. stock and money markets is encouraged The Federal Reserve Act says that the Fed must use​ ______ to achieve its objectives. A. bank reserves B. commercial banks...
Which one of the following statements is true? Select one: a. Traditional Keynesian analysis indicates that...
Which one of the following statements is true? Select one: a. Traditional Keynesian analysis indicates that increases in government purchases are a more potent tool than decreases in taxes. b. According to Keynesians, fiscal policy is the first line of defense against economic downturns. c. Advocates of sacrifice ration claim that a zero-inflation target imposes only small costs on society. d. Sacrifice ration implies that a credible commitment to reducing inflation can lower the costs of disinflation by inducing a...
The crowding out effect is zero if Select one: a. the LM-curve is vertical b. the...
The crowding out effect is zero if Select one: a. the LM-curve is vertical b. the central bank conducts open market sales following fiscal expansion c. income is stimulated via a tax cut rather than an increase in government spending d. the central bank conducts open market purchases following fiscal expansion e. the LM-curve is horizontal An asset (other than money) is considered to be more liquid if Select one: a. it can be quickly and cheaply transferred into money...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT