Question

An economy currently has an inflationary gap. An increase in the money wage rate will​ ________...

An economy currently has an inflationary gap. An increase in the money wage rate will​ ________ the inflationary gap and​ ________ the price level.

A.

​increase; increase

B.

​decrease; increase

C.

​increase; decrease

D.

​decrease; decrease

Which of the following is NOT an asset of the Federal Reserve​ System?

A.

U.S. government securities

B.

loans to depository institutions

C.

reserves of depository institutions

D.

None of the above are correct because they are all assets of the Federal Reserve

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Q1
Answer
Option B.
decrease; increase
The increase in the nominal money wage decreases aggregate supply at each price level and shifts the AS curve to the left which increases price level and decreases the inflationary gap as the actual output decreases.
An inflationary gap is where the actual output is greater than potential output.
-----------
Q2
ANswer
Option C.
reserves of depository institutions
Federal reserve system has Us government securities, and loans to depository institutions as assets and reserves from depositary institutions are liabilities.

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
Which of the following was the largest asset category of the Fed before the crisis (January...
Which of the following was the largest asset category of the Fed before the crisis (January 2007)? A. Government and agency securities B. Gold certificates C. Loans to depository institutions D. Federal Reserve notes E. Depository institution reserves
a. Suppose the economy is in an inflationary gap. If the correct monetary policy is used...
a. Suppose the economy is in an inflationary gap. If the correct monetary policy is used how will the Federal Reserve wish to change its interest rate target? b. Explain how the Fed, using open market operations, would do that. c. Then show, using the liquidity preference model(chapter 15), show how equilibrium interest rates and the money supply change(draw a graph).
Is a recessionary or inflationary gap bad for an economy? Have you ever wondered how the...
Is a recessionary or inflationary gap bad for an economy? Have you ever wondered how the federal government and the Federal Reserve react to smooth out recessionary and inflationary gaps? In this activity, you will explore the concepts of fiscal policy and the attempts the U.S. government takes when the U.S. economy is in a recessionary or inflation gap. You will discuss the concepts of aggregate supply and aggregate demand to determine how the U.S. economy can work its way...
The economy is in a boom and the inflationary gap is large. Describe the discretionary and...
The economy is in a boom and the inflationary gap is large. Describe the discretionary and automatic fiscal policy actions that might occur. Discretionary fiscal policy that might occur is​ ______.    Automatic fiscal policy that might occur is​ ______.        A. an increase in transfer payments and a fall in taxes with no interference by​ Parliament; an increase in government expenditure and a cut in taxes by a decision of Parliament B. a decrease in transfer payments and an increase in...
11. Which of the following could cause the US economy to go into a recession? A....
11. Which of the following could cause the US economy to go into a recession? A. None of the choices is correct B. All of the choices are correct C. a declining stock market and an increase in unemployment D. a decrease in Aggregate Demand E. an increase in pessimism by consumers and businesses 12. Which of the following could help pull the US economy out of a recession? A. All of the choices are correct B. declining stock market...
If the Fed wants to decrease the money supply, it will: Question 22 options: a) increase...
If the Fed wants to decrease the money supply, it will: Question 22 options: a) increase the rate of interest paid on reserves. b) lend money to banks. c) decrease the reserve ratio. d) buy government bonds. The Fed lends to banks: Question 23 options: a) as an attempt to limit the number of new loans extended by banks. b) on a regular basis as a way to increase the money supply. c) as a way of earning profits, which...
9. An increase in the discount rate ________ bank reserves and ________ the money supply if...
9. An increase in the discount rate ________ bank reserves and ________ the money supply if banks respond appropriately to the change in the rate. 22. Typically, a bank's largest asset is its a. reserves. b. holdings of securities. c. deposits of its customers. d. loans.
1-Currently banks are holding a massive amountof excess reserves.   If banks decided that now was the...
1-Currently banks are holding a massive amountof excess reserves.   If banks decided that now was the time to start making loans, which of the following are realistic ways the Federal Reserve could keep the money supply from expanding? CHECK ALL THAT APPLY increase the interest rate paid on bank reserves make discount loans increase the reserve requirement purchase securities from banks sell securities to banks decrease the reserve requirement decrease the interest rate paid on bank reserves 2-If banks choose...
1. A fiscal polciy offset will occur whenever A) the price level rises. B) the interest...
1. A fiscal polciy offset will occur whenever A) the price level rises. B) the interest rate rises. C) the government increases spending in an area that competes with the private sector. D) a, b, and c. 2.  During normal times, discretionary fiscal policy A) is more effective in influencing real GDP than at times of a recession. B) works well because there are no lag problems in influencing real GDP. C) is probably not very effective in influencing real GDP...
Which of the following would NOT decrease the supply of money in a fiat money economy?...
Which of the following would NOT decrease the supply of money in a fiat money economy? a. The Federal Reserve decides to sell existing treasury securities. b. The Federal Reserve increases the required reserve ratio. c. The Federal Reserve decides to link the value of money to a scarce, rare earth metal. d. The Federal Reserve decides to link the value of money to water (a commodity). e. The Federal Reserve increases the discount rate.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT