December 2020

Describe the Fed’s three traditional monetary policy tools. How can the Fed use each of these tools to either increase or decrease bank reserves? Briefly explain how the Fed can reduce the federal funds rate. Why is the federal funds rate considered important if no households or firms (other than banks) can borrow or lend […]

Explain how each of the following tools allows the Fed to increase its control of bank reserves: a. The ability to pay interest on reserves b. The Term Deposit Facility (TDF)

The slow pace of economic recovery had Fed officials considering additional stimulus measures in mid-2012, but as a Wall Street Journal article reported, “The Fed is once again finding itself in a difficult spot. Officials aren’t yet sure if the recent slowdown in growth is transitory or permanent.” Explain why it is important for the Fed to

In July 2012, the government of newly elected French president François Hollande announced that it would sharply increase taxes to try to close a government budget deficit. Use the IS–MP model to analyze the effect of this tax increase on the output gap and the inflation rate, assuming that the real interest rate remains unchanged. Is

The International Monetary Fund publishes the World Economic Outlook. Go to www.imf.org and look at the most recent version available. Look at the data for the cyclically adjusted budget deficit (which the World Economic Outlook calls “General Government Structural Balance”) for Brazil, China, France, and Germany from 2000 to 2017. Use the series for the

Real oil prices decreased significantly during the 1990s. The following graph shows the initial equilibrium at point A and the shift in aggregate supply due to lower oil prices: a. Identify the new equilibrium output gap and inflation rate. b. Assuming that monetary policy does not change, show on the graph how the economy will adjust to

Assume that the central bank has an inflationtarget of 2% and always adjusts monetary policy to keep the inflation rate at 2%. Now assume that the government announces an expansionary fiscal policy of more spending on infrastructure projects and lower taxes. Given the central bank’s monetary policy, will this fiscal policy have any effect on

During the financial crisis, the Federal Reserve developed a number of new policy tools and allowed the monetary base to triple. However, the Fed never indicated that it was willing to allow the inflation rate to rise above its inflation target of 2%. a. What would be the effect on the output gap and the

What are rational expectations? What is the difference between adaptive expectations and rational expectations? How might rational expectations make monetary policy ineffective? Explain why monetary policy might be effective if expectations are rational but a change in policy is a surprise. If expectations are rational, explain how anticipated and unanticipated demand shocks will affect real

These assignment explain how Paul argue for unity between Jews and Gentiles in his letter to the Romans. Further how does paul in 2 corinthians attempt to establish himself as a true apostle Paul establish himself as apostle:Paul argue for unity Why, according to course materials including all readings, does Paul express negative language in