Fiscal and monetary policy can reduce unemployment with no negative side effects
ID: 1211630 • Letter: F
Question
Fiscal and monetary policy can reduce unemployment with no negative side effects. a. True b. False During the financial crisis of 2007-2009, both fiscal and monetary policy turned more expansionary a. True b. False The increased use of PayPal will decrease the velocity of money. a. True b. False In response to the economic downturn, the federal government enacted a fiscal stimulus bill with funding in excess of $700 billion. a. True b. False Expansionary fiscal policy normally lower interest rates. a. True b. False The structural deficit is determined by established expenditure-transfer policies and tax rates and is independent of the current level of GDP. a. True b. False The velocity of circulation is the number of times per year a dollar is spent. a. True b. FalseExplanation / Answer
1) False. Expansonary monetary policy increase the interest rate in long run and unemployment rate remain unchanged.
2) True. In 2007 2009 during great dipression fed has rapidly cut their interest rate.
3) False. Increase of online transaction does not decrease the velocity of money. Velocity of money still remaining same just we cannot see this because it is in the form of electronoic transaction.
4) True. I dont know the exact figure but fed has tried to solve currency crisis by raising funds.
5) True. Expansonary fiscal policy leads to increase transaction demand for money which is adjusted by increase in interest rate.
6) False... Structural deficit mainly takes debt to gdp ratio.
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