which statement best describes contractionary monetary policy?

I love you Bubbas. 2 Monetary and Fiscal . Which of the following tax codes is most progressive? D. When the inflation rate is positive, the nominal interest rate is necessarily greater than the real interest rate. This lowers the interest rate, which risk? Which type of agency would be most likely to focus on protecting the nation's borders? Change ($) = ? His pennies total $5000. Change ($) = $50 million. component of aggregate demand, so this shifts aggregate demand to What essential characteristic of money does fresh fish lack that most makes it ineffective? a. Australia's commemorative $10 banknote is an example of ________ money. Which of the following best describes how contractionary If the economy grows too fast, resulting in a negative output gap, the Fed increases the money supply; and if the economy grows too slow, resulting in a positive output gap, the Fed decreases the money supply. Indicate whether each of the following would cause the Mexican peso to appreciate or depreciate. 2. A decrease in the money supply will lower the interest rate, increase investment spending, and increase aggregate demand and RGDP. Economics questions and answers. What does the word 'fiscal' refer to when discussing fiscal policy? Identify the three tools of monetary policy, and what the Fed would do to increase (or decrease) the (growth of the) money supply. 4. increase a. Elastic. What component of the U.S. government is the final determiner of the constitutionality of any law passed by Congress? Which statement describes the overall value of the Marshall Plan as foreign policy? Required Reserve = ? When the demand for loanable funds increase, interest rates decline. According to the figure, contractionary monetary policy will cause an economy that is initially at full-employment output to go from equilibrium __________ to equilibrium __________ in the short run. Executive privilege allowed him to withhold them. Immediately after the February 2023 rate hike, CBA amended its predictions to expect two further rate hikes in March and April 2023, bringing the cash rate to a peak of 3.85 per cent, which it described as "deeply restrictive territory" for monetary policy. The Supreme Court determines the constitutionality of laws. His pennies total $5000. Which approach to fiscal policy involves and increase in taxation and decrease in spending? Which statement is an example of and open market operation? What type of price elasticity of demand does Novartis drug have? C. persistent currency depreciation relative to primary trading partners. Banks typically loan out a portion of customer deposits. Holding all else constant, in the short run, a decrease in the money supply can cause: a decrease in real gross domestic product (GDP). Suppose Robina Bank receives a deposit of $54,589 and the reserve requirement is %6. Select the statement the best defines required reserves: The amount of banks required by law to hold on each deposit. Also note when the value of the good or service is included in GNP but not in GDP. The Australian Treasury is concerned about counterfeit money because ________________. The Federal Reserve was created by the Federal Reserve Act of 1913. b. Construct and interpret the 90%90 \%90% confidence interval for the proportion of female students who are college bound. True or False: Because either there is life on Mars or there is not, the probability of life on Mars is 0.50.50.5. True or False: securities, which increases the amount of reserves in the banking systems and fuels deposit expansion. Lower tax rates on interest earned from savings. Beginning in January, a person plans to deposit $100\$ 100$100 at the end of each month into an account earning 6%6 \%6% compounded monthly. Rural development is the specialty of which cabinet-level agency? - Creating the federal budget A typical estimate of the sacrifice ratio is 5. $66500 Which of these represents the federal government's first intervention in how U.S. businesses operate? Contractionary Expansionary Fixed monetary policy involves decreasing the money supply. a type of fiscal policy that automatically kicks in without the discretion of policymakers. Which one of the following statements is correct? Suppose you win on a scratch-off lottery ticket and you decide to put all of your $3,500 winnings in the bank. Suppose the economy was experiencing a. Select the proper policy recommendation or economic prediction for each of the following scenarios. It involves a change in the size of the money supply. With adaptive expectations, what is the inevitable consequence of an active, expansionary monetary policy in the short and long run? True or False: A country's _GDP- Gross Domestic Product_ is the total value of all final goods and services its people produce in one year. provides a larger incentive for firms to invest. My boyfriend is stressed, so I am helping him study for his exam. To curb inflation and reduce the money supply,. Which of the following reduces the effects of expansionary fiscal policy? According to supply-side economists, how are taxes and economic growth related? Which of the following is NOT an example of an automatic stabilizer? The New Deal, introduced by President Franklin D. Roosevelt, attempted to relieve the distress caused by Great Depression, which began with the stock-market crash of 1929. B. Cost-push inflation is described as too much money chasing too few goods.. 1 See answer Advertisement cainlee401 The Correct Anser Would Be "A" It increases investment, which increases aggregate demand and creates jobs. so the chairman recommends: Which statement best describes the Federal Reserve's current level of transparency to the American public? Once the Federal Reserve lowers interest rates, businesses and consumers are slow to increase borrowing as a result. 2003-2023 Chegg Inc. All rights reserved. He is now 45 and deposits his savings into a bank. What specific group takes responsibility for the actions? the decision to increase the budget will depend on whether members are using the indoor facility at least two times a week. An economy is facing moderate output growth but significantly high inflation rates. Thirty college-bound students in Portland, Oregon, are asked about the field they would like to pursue in college. Contractionary monetary policy directly pulls money out of the loanable funds market. When actual output exceeds its long-run potential, inflation is the result. Norah walks into her own department store, Bullseye, to pick out a new dress. Which of the following statements best describes what occurs when monetary authorities sell government securities? Consider the impact of monetary policy over time. Which cabinet level agency oversees the U.S. As housing prices began to drop and the economy slowed, the . Fiscal policy deals with the money supply, while monetary policy deals with the budget. From the standpoint of an investor, investing in a stock or bond is similar. Significant revisions to quarterly GDP data and monthly unemployment data delay the identifications of the start of a recession. someone who tries to influence the government in an organized way. Monetary policy takes effect faster because the Federal Reserve can make a decision in a single meeting. Assume a required reserve ratio of 10%. The difference between an economy's actual and potential output. Question 14 Contractionary . - Acting as a lender of last resort - Supervises and regulates member banks Why? some ways they avoid or reduce each Contractionary monetary policy is when a central bank uses its monetary policy tools to fight inflation. They would decrease tax rates in order to increase disposable income, leading to more spending and, ultimately, more jobs. 1 Business Cycles, Aggregate Demand, and Aggregate Supply Using the graph, which of the following statements is true? 2. (round to two decimal places) It includes currency in circulation, checking account deposits and travelers checks. Economic models define global . Assume of 8% reserve requirement in the U.S. and no money leakages: - Increases consumer spending loanable funds market. Investment is a component of aggregate demand, so this shifts aggregate demand to the right. True or False: B. Increasing government spending will likely lead to all of the following, EXCEPT: How would a government most likely change its tax rates during a recession? OIt lowers taxes levied of large corporations. Suppose the President plans to cut taxes for consumers and also plans to increase defense spending. It limits the printing and circulation of new money. Bonds are IOU from a business or government promising to pay back the value of the bond plus interest payments _____ pay(s) the lowest interest rate. Decreasing personal tax rates through fiscal policy will most likely result in: Increased personal income, increased spending, and economic growth. - Increases real GDP in the short run, Is not a result of contractionary monetary policy (tight money policy). - The ability to target interest rates in the economy Which of the following best describes the cause effect chain of contractionary monetary policy? In the case of a proportional tax, individuals are taxed at a rate that _____. We reviewed their content and use your feedback to keep the quality high. Change ($) = ? This raises the interest rate, which The new training method will allow these low-skill workers to quickly and cheaply acquire valuable skills that will then place them in better-paying jobs. Year Actual Inflation rate - The central bank decreases the discount rate. What was Nixon's argument for not turning over the Watergate tapes? Explain the sequence of links connecting an expansionary monetary policy with interest rates, intended investment, aggregate demand, and output. C. Money is always the best possible store of value. Expert Answer 100% (15 ratings) - Provides info. 1. indirectly Which of the following is true about fiscal policy? It helps us predict future changes in the atmosphere or climate. Which public health and safety agency would be most likely to investigate the safety of a new over-the-counter medicine? - the long-term stability of Switzerland's economy, Suppose a wealthy family decides to move $50 million from their Swiss bank account to their Bank of America account. The interest rate banks charge each other for very short-term loans is the ___________. True or False: How do lag times differ between monetary policy implementation and fiscal policy implementation? -to protect constitutional rights, safety, and fairness -to ensure that property rights are protected 120 seconds. What measurement focus is used in government-wide financial statements? What specific group takes responsibility for the actions? Fiscal policy is determined by the Bank of Canada, while monetary policy can be determined by either Parliament or the Bank. Given the equation set forth by the quantity theory of money (M x V = P x Q), where M is the supply of money, V is the velocity of money, P is the price level, and Q is real output, which of the statements best defines V? You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Johnson was directly influenced by New Deal thinking. True or False: During which century did the federal government begin to regulate businesses in the U.S.? Required reserves and leakages amount to 33% of deposits. What level of government levies sales tax? Investment is a component of aggregate demand, so this shifts aggregate demand to the left. In general, because of policy lags, which of the following is true? If the nominal interest rate is 4 percent and the inflation rate is 3 percent, then the real interest rate is 7 percent. I know you will do great on your test. Which diplomatic tool is often used to follow up on an initial agreement? A company has been running an assembly line with 97.42%%97.42 \% \%97.42%% of the products made is acceptable. Bitcoins A contractionary gap occurs when which of the following occurs? How much can a bank lend from an initial 1k deposit? A. It increases federal spending on infrastructure. forces an employer to increase wages at the same rate of inflation. b. - $500. This lowers the interest rate, which Assume of 8% reserve requirement in the U.S. and no money leakages: A monetary policy that lowers interest rates and stimulates borrowing is known as an expansionary monetary policy or loose monetary policy. ensuring that laws do not violate the Constitution. The size of commercial banks' excess reserves decreases, the money supply decreases, and the interest rates rise, thereby causing a decrease in investment spending and real GDP. 3.. What is the simple money multiplier? Tags: Question 7 . C. An increase in the real interest rate is necessarily accompanied by either an increase in the nominal interest rate, an increase in the inflation rate, or both. Which sentence describes how the records of government agencies are often used? Refer to the following figure to answer the questions that follow. 6) Suppose you are in charge of sales at Novartis (the largest pharmaceutical compa-ny) and your company sells a drug that causes bald men to grow hair. Explain the U. monetary policy experience of the 2000-2017 period in the context of Federal Reserve priorities and monetary policy actions. Policies help guide organizations--including governments--in achieving their goals. If things arent going wellunemployment is high growth is lowthen more money flowing around the economy makes it easier for people to get . 1. It includes currency in circulation, checking account deposits and travelers checks. The gender information also is included in the questionnaire. Which statement best describes contractionary monetary policy? ___________________. Who was the first chief of the U.S. Forest Service? Raise taxes and decrease government spending. Refer to the following figure to answer the questions that follow.According to the figure, contractionary monetary policy will cause an economy that is initially at full-employment output to go from equilibrium __________ to equilibrium __________ in the short run. Then, a critical piece broke down. According to the permanent income hypothesis, which situations would result in an immediate increase in consumer spending, which would result in an immediate decrease in consumer spending, and which would result in no change in consumer spending? Business Economics Classify the actions described as examples of expansionary monetary policy (intended to stimulate the economy), contractionary or restrictive monetary policy (meant to slow down the economy), or not an example of monetary policy. Keynesian (intervene) and Classical (do nothing). Q. 2. 3. The Federal Reserve, which maintains reserve banks across the United States, is responsible for monetary policy. - The ability to attract foreign direct investment Its impact was mostly positive as Western Europe became or remained strongly democratic. decreasing reserves to increase interest rates, Which of the given statements is the most direct result of the correct monetary policy from the first question? Which phrase best defines the term lobbyist? d. Which phrase best defines the term lobbyist? Which statement best describes contractionary monetary policy? The state of the economy can affect the amount of excess reserves that banks keep on reserve, thereby affecting the impact of the money multiplier. home, at school, or at work? It includes currency in circulation, checking account deposits and travelers checks. Monetary policy is under the control of this agency. In a monetary economy there always has to be a double coincidence of wants. The most appropriate countercyclical policy, or stabilization policy, in times of unemployment, according to Classical economists, is for the government to do which of the following? a. - Some loan recipients choose to hold some cash instead of depositing all of it in banks. If the value of the good or service is not included, explain why not. Suppose a wealthy family decides to move $50 million from their Swiss bank account to their Bank of America account. The Federal Deposit Insurance Corp. (FDIC) protects bank depositors from bank failure. One where high-income people are taxed at a higher rate. If the supply of money increases, what happens in the money market? use the best measure of center for both data sets to determine whether the club should increase . Which resource management agency would most likely set guidelines for oil pipelines and windmills? Compose a letter briefly describing the background of the problem. For instance, when the Fed buys bonds, this (2) _________ in demand for bonds causes nominal interest rates to (3) _________. What is the best and quickest way to find out the purpose of specific government agency? Expansionary fiscal policy is designed to increase aggregate demand. The U.S. Constitution states that the federal government can and should establish both an army and a navy. Numbers and Graphs: Monetary Policy (Ch 15) LRAS PRICE Which of the following best describes the situation shown on the graph? It decreases the ability of brokers to trade stocks. Increase government spending and decrease taxes. They must fall within the powers assigned to presidents by the Constitution. What was the U.S. government required to establish, according to its Constitution? In your meeting with the Federal Open Market Committee, the committee unanimously votes to increase the money supple using open market operations (OMOs). a. does not represent a leakage from the money multiplier process? CONCEPT Aggregate Supply and Aggregate Demand 3 Select the situation below in which contractionary monetary policy would be needed. government spending, taxes, and transfer payments; aggregate demand. Which type of agency would be most likely to focus on protecting the nation's borders? 2011 0% In the long run, ____________ prices adjust. The Servicemen's Readjustment Act of 1944, also known as the G.I. What essential characteristic of money does cattle lack that most makes it ineffective? If expansionary fiscal policy is necessary, what changes should the government make to spending or taxes? 1. Slovenia Question: 90. The purpose of contractionary fiscal policy is to slow growth to a healthy economic level. the right. Which two famous economists hypothesized that people would adapt their expectations about inflation to something consistent with their prior experience? Suppose a wealthy family decides to move $50 million from their Swiss bank account to their Bank of America account. The Federal Reserve (Fed) has very little effect on the money multiplier. Given that the US dollar has depreciated, the aggregate demand in the united states should ____. Which goal of foreign policy in included in all the other goals? According to the figure, if the economy started at full-employment output, expansionary monetary policy would cause real gross domestic product (GDP) to ______________ in the short run. Explain briefly. The higher taxes are, the less economic growth there will be. Cypress In spite of many bank failures, the people of (6) ________ did not want investors and banks to receive a gov. What does the Tenth Amendment have to do with American federalism? Classify the actions described as examples of expansionary monetary policy (intended to stimulate the economy), contractionary or restrictive monetary policy (meant to slow down the economy), or not an example of monetary policy. According to the permanent income hypothesis, which situations would result in an immediate increase in consumer spending, which would result in an immediate decrease in consumer spending, and which would result in no change in consumer spending? The expansionary monetary policy is designed to: Lower the interest rate, increase private investment, increase aggregate demand and increase output. Which of the following will a Keynesian economist most likely favor if the economy is operating at point a? Since Estrovia has inflation rate of 9% as compared with average of 4%, her central bank should implement a contractionary monetary policy to lower the inflation rate, otherwise the economy will heat up and hit a severe recession. What is an example of an item that would fall under mandatory spending? Data on GDP is release quarterly, meaning that an economic downturn beginning in January may not be identified until more than three months later. How would we describe an economy that corresponds to the following image? 25. Consider the two examples of labour demand below. Which of the following is a possible explanation as to why this policy failed to restore the economy to long- run equilibrium. c. Section 11(c) of the OSH Act. When the economy is growing too slowly (recession) or too quickly (high inflation), the two approaches the government can use, according to economists, include which of the following? The European Central Bank, responsible for monetary policy within the European Union. Contractionary monetary policy is used to reduce inflation. Which ex. 3. Maintain full employment, keep inflation under control, and drive economic growth. . 'Crowding out' refers to which of the following? Label the scenarios with the type of monetary policy lag represented in each. Classify each of the variables listed by the policy's short run effect upon them. A contractionary policy is a tool used to reduce government spending or the rate of monetary expansion by a central bank to combat rising inflation. Who does the U.S. Constitution assign sole responsibility for the budget and federal taxation? When a company issues stock, it is agreeing to share the company's __ and __ with the investor. inflation is kept in check in the long run by keeping the growth of M1 and M2 on a steady path. The interest rate that the Federal Reserve Bank (Fed) charges member banks for loans is knowns as the _______________. Which of the following is true regarding capitalism and communism? 1. changing the tax rates, to raise more tax money. Suppose that you are employed as an advisor to the central bank. His pennies total $5000. Which event is most likely an outcome of research by the Environmental Protection Agency? The use of government spending, taxes, and transfer payments to influence aggregate demand. Which of the following best describes how contractionary Which statement best describes how the circular economic flow will be affected by this action? It limits the printing and circulation of new money. Reserves - unexpectedly gives each person in the economy an extra $1000 tax refund. Firms announce that they expect more layoffs next year than were previously anticipated. When the Fed adjusts its interest rate, it directly influences consumer saving. It's also called a restrictive monetary policy because it restricts liquidity. The government will use its fiscal policy toolkit to do what? Which of the following best describes an contractionary monetary policy? In the years leading up to the financial crisis of 2008-2009, the market for housing can be described as: booming, driven by rising prices and increased demand due to low interest rates. Excess Reserves = ? monetary policy affects the aggregate demand curve in the aggregate Refer to the following figure to answer the questions that follow. Contractionary monetary policy directly pulls money out of the loanable funds market. Which of the following statements is FALSE regarding the government's fiscal policy toolkit? questions relating to the Problem Solving framework statements highlighted in the Coursebook. The following table describes the aggregate demand curve, where real GDP is expressed as the percent deviation from potential GDP and inflation is expressed as a percentage: Real GDP 2.0 1.0 0.0 -1.0 -2.0 Inflation 0.0 X % 3.0 4.0 5.0 7.0 9.0 Due to a price shock, inflation increases by 2%. A. loanable funds market. Johnson was directly influenced by New Deal thinking. President Lyndon B. Johnson created a set of programs that were known as the Great Society. In the long run, the decrease in the money supply will cause the price level in the economy to __________ and real GDP to ___________. loanable funds market. How does it affect the accounting equation? Assume of 8% reserve requirement in the U.S. and that Bank of America account holds no excess reserves: - Distributes coin and currency - Increases aggregate demand in the short run Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model? Banks in Ruritania have a required reserve ratio of 5%. Which public health and safety agency would be most likely to investigate the safety of a new over-the-counter medicine? In 2013, (1) _______ suffered from an unemployment rate of 25% and huge amounts of debt. Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, David R. Anderson, Dennis J. Sweeney, James J Cochran, Jeffrey D. Camm, Thomas A. Williams. 1. Transcribed Image Text: K- the graph to the right represents the market for DVDs The value of consumer surplus is $40 million (Enter your response as an integer) The value of producer surplus is $20 million (Enter your response as an integer) Using the triangle drawing tool twice, draw consumer and producer surplus Properly label each triangle Carefully follow the instructions above and only . Most often, the prices that are inflexible are: Which of the following best describes how expansionary monetary policy affects the aggregate demand curve in the aggregate demand-aggregate supply model? Contractionary monetary policy is when a central bank uses its monetary policy tools to fight inflation. - Managing the U.S. money supply It reflects the repeated _expansions___ and __Contractions___of the economy. - Minting coin currency Phil Frugal has been saving his pennies since he was five years old. That's between 2% to 3% a year. In the U.S., banks keep the entire value of all customer deposits in the bank vault to meet customer withdrawals. This lowers the interest rate, which It should decrease government spending and increase taxes to decrease aggregate demand. Label the scenarios with the type of monetary policy lag represented in each. What are the bank's loans in Table 2? - $5000. It limits the printing and circulation of new money. The economy is producing at a real GDP greater than the LRAS. The reserve requirement is the proportion of its deposits that a bank must keep on hand and not use to create money through making loans to borrowers. Phil Frugal has been saving his pennies since he was five years old. What is the term for this? Investment is a It involves spurring or slowing economic activity using taxes and government spending. the left. Inflation is running at 1%, but the chairman considers an inflation rate of 3% to be a reasonable goal. This type of fiscal policy is best used during times of economic downturn, and it can increase a country's gross domestic product (GDP) through a principle called the "fiscal multiplier" (or the amount in which government spending can increase the national income). Cash Reserve Ratio (CRR) is one of the main components of the RBI's monetary policy, which is used to regulate the money supply, level of inflation, and liquidity in the country. Samples of 500 pieces were selected at random, and the defective rate was found to be 0.025%0.025 \%0.025%. Increase government spending, lower taxes, or raise transfer payments. True or False: The gov. Investment is a component of aggregate demand, so this shifts aggregate demand to the left. Which statement accurately describes the Supreme Court's ability to shape public policy? The government has just lowered personal income taxes. The higher the CRR, the lower is the liquidity with the banks and vice-versa. Suppose the table below lists the actual annual inflation rates for 2010 to 2015. Assume the economy is in a recession and the Federal Reserve takes the appropriate monetary policy actions. It's how the bank slows economic growth. What is the amount that Robina Bank must have in excess reserves from this initial deposit? - The central bank increases the required reserve ratio. provides a larger incentive for firms to invest. Match each policy with the graph showing the corresponding shift. How do automatic stabilizers benefit the economy? Greece Contractionary or restrictive monetary policy (tight money policy) will cause interest rates to: When current output is greater than potential output, which of the given monetary policies is the Federal Preserve (Fed) likely to enact? provides a larger incentive for firms to invest. A fold in the surface of the cerebral cortex is called _________. The following are the main limitations of the monetary policy adopted by the Reserve Bank: 1. B) aggregate demand to fall and the price level to rise. B. a cyclical downturn in the economies of primary trading partners. Which of these is a common and permitted form of lobbying? The actual level of aggregate demand is less than the full employment level of output. Since then, 40 countries around the world have begun using some form of polymer banknotes. True or False: Which of the following best describes the 'repeal and replace' of a law? The Federal Reserve sells bonds via the commercial banking system. Printing more money will affect real GDP only in the short run because all prices do not adjust fully in the short run. The term liquidity trap describes a macroeconomic scenario in which: low interest rates cause people to hoard money, making output and employment stagnate. - The amount a bank has on hand fulfill the cash demands of its customers and the reserve requirements of the Fed. M1 is the narrowest definition of the money supply. Which of the following is an example of contractionary monetary policy? An automatic stabilizer is BEST defined as _____. Ireland

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