Question

Most Keynesians believe that monetary policy is best used to control __________. Group of answer choices...

Most Keynesians believe that monetary policy is best used to control __________.

Group of answer choices

balance of payments

interest rates

minimum wages

the federal budget

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Most Keynesians believe that the monetary policy is used best to control interest rates. This is because the Central Bank alters the money supply to control the interest rates or to target the interest rates. Increase in money supply will lead to decrease in interest rates and a decrease in money supply would lead to to an increase in interest rates. The central bank uses monetary policy to increase or decrease the interest rates to manage aggregate demand.

Monetary policy is not used to control minimum wages aur Federal budget. Moreover monetary policy cannot be used to control Balance of payments in all situations.

Therefore according to Keynesians, monetary policy is best used to control interest rates.

Hence second option is correct.

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
Fiscal policy is: Group of answer choices the Federal Reserve's control of interest rates. the use...
Fiscal policy is: Group of answer choices the Federal Reserve's control of interest rates. the use of government spending and taxation to move the economy toward meeting its economic goals. the advocating of tax reductions, regardless of the state of the economy. a change in the money policy to solve domestic problems.
An expansionary monetary policy would be more effective if it caused Group of answer choices a)...
An expansionary monetary policy would be more effective if it caused Group of answer choices a) interest rates to decrease, leading to an exchange rate depreciation and a rise in net exports. b) interest rates to increase, leading to an exchange rate depreciation and a rise in net exports. c) interest rates to increase, leading to an exchange rate appreciation and a fall in net exports. d) interest rates to decrease, leading to an exchange rate appreciation and a fall...
1. If the Fed engages in contractionary monetary policy, we would expect: Group of answer choices...
1. If the Fed engages in contractionary monetary policy, we would expect: Group of answer choices AD to be greater at any given price level AS to be greater at any given price level AD to be lower at any given price level AS to be lower at any given price level 2. If households save $0.20 of every dollar of additional income, what is the size of the Keynesian government spending multiplier? Group of answer choices 0.20 1.00 1.25...
1. The most commonly used tool of monetary policy in the U.S. is the reserve requirement...
1. The most commonly used tool of monetary policy in the U.S. is the reserve requirement commercial banks must keep on hand at the Fed. TRUE/FALSE? 2. Open market operations take place when the central bank sells or buys U.S. Treasury bonds in order to influence the quantity of bank reserves and the level of interest rates. The specific interest rate targeted in open market operations is the discount rate.  TRUE/FALSE? 3. The Federal Reserve System is run by the government,...
A command-and-control policy: Group of answer choices is unlikely to have any impact on the amount...
A command-and-control policy: Group of answer choices is unlikely to have any impact on the amount of pollution emitted. does not affect the production costs of firms. usually finds the most efficient pollution abatement technology. decreases the incentive for firms to develop efficient abatement technologies.
The most important function of the Fed is the management of monetary policy and control of...
The most important function of the Fed is the management of monetary policy and control of the money supply. However the Fed has other important functions: 1. The Fed issues “Federal Reserve Notes,” the paper currency used in the U.S. monetary system. 2. The Fed provides a check collection service for banks (checks are also cleared locally or by private clearing firms). 3. Federal Reserve System acts as the fiscal agent for the Federal government. 4. The Federal Reserve System...
5.         Answer True or False for each of the following.                           
5.         Answer True or False for each of the following.                                            5 pts each A) The Keynesians claim interest rates have a powerful effect on savings since people mainly save to earn interest. B) The Keynesians claim that wages and prices are “downward sticky”. C)In the Keynesian model the velocity of money moves against GDP. D) Government spending can raise Aggregate Demand and real GDP in the Keynesian model. E) Keynesians believe that monetary policy is very powerful at moving...
Monetary Policy set by the Federal Reserve directly impacts the amount of money a bank may...
Monetary Policy set by the Federal Reserve directly impacts the amount of money a bank may loan out because the “Fed” _____. Group of answer choices: sets reserve requirements insures that loans are repaid clears all loan payments prints new money
1. Which of the following best describes the interest rate effect? Group of answer choices a...
1. Which of the following best describes the interest rate effect? Group of answer choices a decrease in the supply of money will increase interest rates and reduce interest-sensitive consumption and investment spending. an increase in the price level will increase the demand for money, reduce interest rates, and decrease consumption and investment spending. an increase in the price level will increase the demand for money, increase interest rates, and decrease consumption and investment spending. an increase in the price...
1) Which budget is the starting point in preparing financial budgets? Group of answer choices A)...
1) Which budget is the starting point in preparing financial budgets? Group of answer choices A) the budgeted balance sheet B) the capital expense budget C) the budgeted income statement D) the cash receipts budget 2) The direct materials budget is prepared using which budget's information? Group of answer choices A) raw materials budget B) cash receipts budget C) cash payments budget D) production budget 3. Which of the following includes only financial budgets? Group of answer choices A) budgeted...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT