PLEASE HELP ME ANSWER THIS QUESTIONS 1.) For this questions, assume that the Fed

Question

PLEASE HELP ME ANSWER THIS QUESTIONS

1.) For this questions, assume that the Fed sets monetary policy according to the Taylor rule. Suppose current U.S. macroeconomics conditions are represented by the following: n <n?* and u>u. Given this information, we would expect that the Fed will:
a) implement a monetary contraction
b) more information is needed to answer this question
c) maintain it's current stance of monetary policy
d) implement a monetary expansion

2.) There are how many members of the Federal Open Market Committee?
a) 7
b) 12
c) 5
d) 15
e) 14

3.) In the medium run, a reduction in inflation causes
a) no change in the opportunity cost of holding money
b) an increase in the opportunity cost of holding money
c) individuals to switch from holding money to bonds and reduce their real money balances
d) a reduction in the opportunity cost of holding money

4.) Reducing the maximum LTV is likely to ____ demand and thus ____ the housing price increase.
a) increase, slow down
b) decrease, speed up
c) increase, speed up
d) decrease, slow down

5) When the Fed wants to signal the public about the direction of monetary policy, it will likely use
a) open market operations
b) a change in the reserve requirement
c) a change in the discount rate
d) a public announcement about a change in the targeted federal funds rate
e) all of the above

Explanation / Answer

Answers:

1.) For this questions, assume that the Fed sets monetary policy according to the Taylor rule. Suppose current U.S. macroeconomics conditions are represented by the following: n <n?* and u>u. Given this information, we would expect that the Fed will:
d) implement a monetary expansion

2.) There are how many members of the Federal Open Market Committee?
b) 12

3.) In the medium run, a reduction in inflation causes:
d) a reduction in the opportunity cost of holding money

4.) Reducing the maximum LTV is likely to decrease demand and thus speed up the housing price increase.
b) decrease, speed up

5) When the Fed wants to signal the public about the direction of monetary policy, it will likely use
e) all of the above

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.