Question

5. What impact can the Fed have on housing prices ? 4. In general, there is:...

5. What impact can the Fed have on housing prices ?

4. In general, there is:

a.     a positive relationship between unemployment and inflation.

b.    an inverse relationship between unemployment and inflation.

c.     an inverse relationship between GNP and inflation.

d.    a positive relationship between GNP and unemployment.

Homework Answers

Answer #1

a) Fed can mange the interest rate in the market I.e. the prime lending rate,, if the rates are high the demand for the loans to buy houses will be high and that will lead to a higher price of the houses, if the interest rate is high the loans and the installments will be higher that will decease the demand and the price will fall.

b) "B"

there is an inverse relationship between the unemployment and inflation. as the inflation rises the unemployment will fall and vice versa.

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
which of the following statements is not a premise associated with the Phillips curve? a) the...
which of the following statements is not a premise associated with the Phillips curve? a) the Phillips curve is applicable in both the short run and long run. b) the Phillips curve can be viewed as a policy menu, a nation could choose low inflation and high unemployment, or high inflation and low unemployment, or anywhere in between c) when unemployment is low, employers have trouble attracting workers, so they raise wages faster inflation in wages soon turns into inflation...
In pursuing its monetary policy goals, the Fed Select one: A. can easily address inflation and...
In pursuing its monetary policy goals, the Fed Select one: A. can easily address inflation and unemployment at the same time. B. only ever needs to use an expansionary (stimulative) policy. C. must choose between addressing inflation or unemployment, since these goals conflict. D. has to follow the wishes of Congress. When the Fed wants to increase the level of reserves in banks, it can Select one: A. increase the discount rate. B. sell government bonds to banks. C. buy...
In March 2013 the Fed announced that it might decrease its open market purchases of securities...
In March 2013 the Fed announced that it might decrease its open market purchases of securities by the end of the year. This announcement suggests that the Fed is concerned that a. the unemployment rate will increase. b. the inflation rate will rise. c. the federal funds interest rate will fall too low for the Fed to control it. d. the federal funds interest rate will rise too high for the Fed to control it. In the aggregate supply-aggregate demand...
4. You have the assignment of making a recommendation to the Chairman of the Fed during...
4. You have the assignment of making a recommendation to the Chairman of the Fed during a period of persistent, high inflation. What could you do to restore stable prices?
What does our text conclude about falling prices in the housing market? Falling prices is only...
What does our text conclude about falling prices in the housing market? Falling prices is only a good thing if it happens due to a decrease in the demand for houses. Falling prices in the housing market means that people expect the future price of houses to be lower; this negatively impacts the current demand for houses if prices fall consistently. All of the listed choices are correct. When prices rise and then fall in cycles, it will not negatively...
5. Government purchases of goods and services differ from changes in taxes and transfer payments in...
5. Government purchases of goods and services differ from changes in taxes and transfer payments in that: A) the former is a type of fiscal policy, while the latter is a type of monetary policy. B) the former is a type of monetary policy, while the latter is a type of fiscal policy. C) the former influences aggregate demand directly, while the latter influences aggregate demand indirectly. D) the former influences aggregate demand indirectly, while the latter influences aggregate demand...
4- What is it called when the Fed takes actions that result in an increase in...
4- What is it called when the Fed takes actions that result in an increase in the money supply? A. Contractionary fiscal policy B. Expansionary fiscal policy C. Contractionary monetary policy D. Expansionary monetary policy 5. If the federal government finances a deficit by borrowing, we can expect A. National debt will decrease B. More income taxes will be collected C. Higher interest rates due to the higher demand for loanable funds D. Higher Inflation in the economy E. All...
Impact of inflation on investments   Personal Finance Problem  You are interested in an investment project that...
Impact of inflation on investments   Personal Finance Problem  You are interested in an investment project that costs $40,000 initially. The investment has a 5​-year horizon and promises future​ end-of-year cash inflows of $12,000​, $12,500​, $11,500​, $9,000​, $8,500​, respectively. Your current opportunity cost is 6.50% per year.​ However, the Fed has stated that inflation may rise by 1.5% or may fall by the same amount over the next 5 years. Assume a direct positive impact of inflation on the prevailing rates​...
2. a) Suppose that, initially, ? = 0%. What would the Fed have to do to...
2. a) Suppose that, initially, ? = 0%. What would the Fed have to do to get inflation started in the IS-LM/PC model? b) Then, how would the Fed stabilize the inflation rate after, say, one period? c) What effect would this have on the nominal interest rate and why? d) What effect would this have on the velocity of money and why? [Even though the effect might be quite small.]
Housing prices in Athens have been researched extensively by faculty at UGA. The current thinking is...
Housing prices in Athens have been researched extensively by faculty at UGA. The current thinking is that housing prices follow an approximately normal model with mean $212,000 and standard deviation $7,357. (a) What proportion of housing prices in Athens are less than $204,000?  (3 decimal places) (b) A realtor takes a random sample of 131 houses in Athens. Determine the probability the average selling price is greater than $213,000?  (3 decimal places) (c) A realtor in Asheville, NC wants to estimate the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT