Reference no: EM13182399
We mentioned how difficult it can be for the Federal Reserve to actually control aggregate demand: Its control over the broader money supply (M1 and M2) is weak and indirect, plus it can't control velocity very much at all. Let's translate the following bullet points from the chapter into an expanded aggregate demand equation. You know that increasing AD means increasing spending growth, M + v, but now you know that M (growth in M1 or M2, money measures that include checking accounts) depends on growth in the monetary base (MB) and on the money multiplier (MM). That means an increase in AD requires an increase in MB + MM + v.
Let's apply this fact to the following cases mentioned in the chapter. In all cases, the Federal Reserve is trying to boost AD by raising MB. But if there's a fall in MM or a fall in v at the same time, the Fed's actions might do nothing to AD. In each case below, what are we concerned about: a fall in MM or a fall in v?
a. Will banks lend out all the new reserves or will they lend out only a portion, holding the rest as excess reserves?
b. Will increase in the monetary base translate into new bank loans?
c. If businesses do borrow, will they promptly hire labor and capital, or will they just hold the money as a precaution against bad times?
|
What is the amount of depreciation expense
: what is the amount of depreciation expense for each of the five using the straight line method and what is the amount of depreciation expense for each of the five years using the double declining balance method?
|
|
Find who is more likely to take a bigger risks
: 1) Whether an asset is "liquid" often depends on what situation you are in. For each of the pairs of assets below, which is more liquid in the particular setting? You want to buy a sofa: A savings account or currency You want to trade for a bolo..
|
|
Explain all organic products and cataloytic conditions
: All organic (carbon-cointaining) products and cataloytic conditons must be shown as well as multiplel products. Studying for final. 2,4dimethypent-2- is the starting product
|
|
Describe responsibilities of internal and external auditors
: Identify the company's independent registered public accounting firm. Determine how long this firm has served as the external auditors and other services, if any, provided to or on behalf of the company.
|
|
Will increase in monetary base translate into new bank loans
: You know that increasing AD means increasing spending growth, M + v, but now you know that M (growth in M1 or M2, money measures that include checking accounts) depends on growth in the monetary base (MB) and on the money multiplier (MM). That me..
|
|
Determine the vaule of kc and kp
: An industrial chemist 2.00 moles each of h2 and co2 in a 2.00 L container at constant temperature of 800 degree celcuis. this reaction occurs:
|
|
Explain the various uses of radioactivity in healthcare
: What are the various uses of radioactivity in healthcare? What are the future trends in healthcare with respect to the use of radioactivity?
|
|
What was the main component of ni
: 1. What is the difference between gross domestic product (GDP) and gross national product (GNP)? 2. Based on the table, what calculations must you make to determine GNP from GDP? 3. What is national income (NI)? 4. Which was higher in this year, GNP ..
|
|
How does accounting information impact business decisions
: What information were you able to glean about the financial situation of this company from the financials and how does this accounting information impact business decisions?
|