1. If the Federal Reserve buys bonds on the open market, how are the purchases o
ID: 1163798 • Letter: 1
Question
1. If the Federal Reserve buys bonds on the open market, how are the purchases of U.S. financial assets by foreigners and the international value of the dollar impacted?Financial Assets / International Value of Dollar Increase / Increase Increase / Decrease No Change / Decrease Decrease / Decrease Decrease / Increase 2. According to the long-run Phillips Curve an increase in unemployment occurs when inflation increases. an increase in unemployment occurs when inflation decreases. fiscal and monetary policies that impact aggregate demand do not impact the natural rate of unemployment. fiscal and monetary policies that impact aggregate demand help increase the natural rate of unemployment. fiscal and monetary policies that impact aggregate demand help decrease the natural rate of unemployment. 1. If the Federal Reserve buys bonds on the open market, how are the purchases of U.S. financial assets by foreigners and the international value of the dollar impacted?
Financial Assets / International Value of Dollar Increase / Increase Increase / Decrease No Change / Decrease Decrease / Decrease Decrease / Increase
Explanation / Answer
1. Increase / decrease
When fed would buy bonds in OMO the money supply in the market would increase, leading to lower interest rates.
2.an increase in unemployment occurs when inflation decreases.
Philip curve shows the inverse relationship of unemployment and inflation, that is, unemployment increases woh decrease in inflation and the vice versa.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.