Reference no: EM13175737
1. Briefly define the following terms:
a. Output gap
b. Federal funds rate
c. Open market operation
2. How does the Fed control the federal funds rate? If the Fed wants to lower the federal funds rate, what will it do?
3. When will the Fed want to raise the Federal funds rate? What is the ultimate effect on real GDP and the inflation rate from raising the federal funds rate?
4. Tell the path through which a fall in the federal funds rate affects real GDP and inflation.
5. What role does the multiplier effect play in monetary policy?
Answer the following multiple choice questions.
6. An open market purchase of government securities ____ the federal funds rate and ____ the supply of loanable funds.
a. raises; increases
b. raises; decreases
c. lowers; increases
d. lowers; decreases
7. When the Fed raises the federal funds rate, consumption expenditure ____, investment ____, and aggregate demand ____.
a. increases; increases; increases
b. increases; decreases; changes but whether it increases or decreases is uncertain
c. decreases; increases; decreases
d. decreases; decreases; decreases
8. If the Fed is concerned about a recession, the Fed will
a. buy government securities, lower the federal funds rate, and increase aggregate supply.
b. sell government securities, lower the federal funds rate, and increase aggregate demand.
c. sell government securities, raise the federal funds rate, and increase aggregate demand.
d. buy government securities, lower the federal funds rate, and increase aggregate demand.
|
Less effective at listening
: Many people find it difficult to listen carefully to others. Describe one reason you may be less effective at listening and one way you can suggest to improve your own listening habits.
|
|
Adiabatic flame temperature of methane gas
: What is the adiabatic flame temperature of methane gas burned with 300% excess air at 100C? when methane enters at 25C. all products are in gaseous state.
|
|
Effective verbal communication can be challenge
: Effective verbal communication can be a challenge. Describe a challenge you might experience if you were to communicate the news that you received a low grade
|
|
The south voted for democrats at all levels
: The civil rights movement and the Vietnam War contributed to the end of the "Solid South." Until the 1970s, the South voted for Democrats at all levels. Republicans have had success using values to appeal to southern voters.
|
|
When will the fed want to raise the federal funds rate?
: When will the Fed want to raise the Federal funds rate? What is the ultimate effect on real GDP and the inflation rate from raising the federal funds rate?
|
|
Affect the labor market and potential gdp
: How does an increase in income taxes on wage income affect the labor market and potential GDP? How does an increase in income taxes on interest income affect the capital market and potential GDP?
|
|
What is the effect on the unemployment rate?
: Using a long-run Phillips curve, what is the effect on the unemployment rate if the inflation rate rises and people expect the rise.
|
|
What is the change in equilibrium expenditure
: Suppose the multiplier equals 10.0 and autonomous expenditure decreases by $30 billion. What is the change in equilibrium expenditure?
|
|
What occurs when real gdp exceeds potential gdp
: What is the effect on the aggregate demand curve of the increase in government purchases? What occurs when real GDP exceeds potential GDP? What curve shifts in order to restore real GDP to potential GDP? Why does this curve shift?
|