Question

when money supply increase permanently in a large open economy, what happens to the long term...

when money supply increase permanently in a large open economy, what happens to the long term nominal interest rate?
a, long term nominal interest rate increase
b, long term nominal interest rate decrease
c, long term nominal interest rate unchanged
d, long term nominal interest rate may increase or decrease

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
When a temporary adverse supply shock hits a large open economy, it causes the current account...
When a temporary adverse supply shock hits a large open economy, it causes the current account to ________ and investment to ________. Answer: A, but i have no idea why the investment falls. can anyone explain in detail ? ( not in the form of your handwriting, i may not recognize it) A) fall; fall B) rise; remain unchanged C) fall; remain unchanged D) rise; fall
Present an analysis where you examine the long-term impact of an increase in the money supply....
Present an analysis where you examine the long-term impact of an increase in the money supply. Use your analysis to explain why increases in the money supply may explain the observed changes in both product prices and nominal wage levels over time. Also, uses your analysis to explain (using words) what it means when macroeconomists say “money is neutral.”  
Explain what happens to the interest rate if the money supply increases or decreases and the...
Explain what happens to the interest rate if the money supply increases or decreases and the money demand remains unchanged. Explain what happens to the interest rate if the money demand increases or decreases and the money supply remains unchanged.
What happens to interest rates when the Fed increase money? When it decreases money? What is...
What happens to interest rates when the Fed increase money? When it decreases money? What is the primary role of money? What is the benchmark interest rate in the US? The goal of the monetary system is to ensure just the right amount of money is in the economy. Explain why this is the case.
When future labour income falls in a large open economy, it causes the current account to...
When future labour income falls in a large open economy, it causes the current account to ________ and investment to ________. Please solve this question by using the concept/idea of national and savings in open economy with world interest rate. A) fall; rise B) rise; remain unchanged C) fall; remain unchanged D) rise; rise
Compared with a closed economy, an increase in the growth rate of the money supply in...
Compared with a closed economy, an increase in the growth rate of the money supply in an open economy increases aggregate demand by a: A. larger amount only in the short run. B. smaller amount in both the short run and the long run. C. smaller amount only in the short run. D. larger amount in both the short run and the long run.
Suppose the Fed decides to increase the money supply through open market purchases, what will happen...
Suppose the Fed decides to increase the money supply through open market purchases, what will happen to the nominal interest rate (i)? Does this result contradict the goal of open market purchases in counteracting a recession? If so, why?
Present an analysis where you examine the long term impact of an increase in the money...
Present an analysis where you examine the long term impact of an increase in the money supply. Use your analysis to explain why increases in the money supply may explain the observed changes in both product prices and nominal wage levels over time. Also, uses your analysis to explain (using words) what it means when macroeconomists say “money is neutral.”
present an analysis where you examine the long term impact of an increase in the money...
present an analysis where you examine the long term impact of an increase in the money supply. use your analysis to explain why increases in the money supply may explain the observed changes in both product prices and nominal wage levels over time. also, use your analysis to explain (using words) what it means when macroeconomists say money is neutral
What happens to the money supply and the economy when the following monetary policy actions are...
What happens to the money supply and the economy when the following monetary policy actions are taken: Reserve Requirements are increased? Reserve Requirements are decreased? The Fed sells bonds? (also called quantitative tightening) The Fed buys bonds? (also called quantitative easing) Discount rate increases? Discount rate decreases?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT