1."Money is neutral" means that either an expansionary or a contractionary monetary policy:Group of answer choicesa. will make society neither more nor less moral than it was before.b. will not change output in the short run.c. will not change output in the medium run.d. will not change the price level in the short run.e. will not change the price level in the medium run.2. For this question, assume that the economy is initially operating at the natural level of output. When the central bankcontrols the interest rates, an increase in the price target will cause:Group of answer choicesa. no change in the real wage in the medium run.b. an increase in investment in the medium run.c. a reduction in the interest rate in the medium run.d. no change in the nominal wage in the medium run.3. Suppose the central bank controls the interest rate. Using the AS-AD diagram and assuming that the economy isinitially operating at the natural level of output, an increase in taxes will cause which of the following?Group of answer choicesa. a reduction in output and no change in the aggregate price level in the short runb. a reduction in employment and no change in the nominal wage in the short runc. an increase in investment in the medium rund. an increase in the aggregate price level, no change in output and no change in the interest rate in the medium run4. In the aggregate supply relation, the current price level depends upon:Group of answer choicesa. the markup, m.b. monetary policy.c. fiscal policy.d. consumer confidence.e. all of the above5. If there were perfect competition, then m (in the price setting equation P = (1+m)W), would equalGroup of answer choicesa. Wb. Pc. 1d. 0.5e. none of the above6. The natural rate of unemployment is the rate of unemployment:Group of answer choicesa. that occurs when the money market is in equilibrium.b. where the markup of prices over costs is zero.c. where the markup of prices over costs is equal to its historical value.d. that occurs when both the goods and financial markets are in equilibrium.e. consistent with both the wage-setting and price-setting equations when the expected and actual price level are thesame.7. At the current level of output, suppose the actual price level is less than the price level that individuals expect (i.e., P+ <pet).We know that:Group of answer choicesa. output is currently below the natural level of output.b. the interest rate will tend to rise as the economy adjusts to this situation.c. the nominal wage will tend to increase as individuals revise their expectations of the price level.d. any subsequent reduction in the aggregate price level will cause an increase in the real money supply and a rightwardshift in the aggregate demand curve.e. none of the above

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1."Money is neutral" means that either an expansionary or a contractionary monetary polic Group of answer choices a. will make society neither more nor less moral than it was before. b. will not change output in the short run. c. will not change output in the medium run. d. will not change the price level in the short run. e. will not change the price level in the medium run.

1."Money is neutral" means that either an expansionary or a contractionary monetary polic Group of answer choices a. will make society neither more nor less moral than it was before. b. will not change output in the short run. c. will not change output in the medium run. d. will not change the price level in the short run. e. will not change the price level in the medium run.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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19. Monetary policy that reduces the money supply will cause the interest rate to which will cause investment to and output to by an amount than the initial change in investment. a. Decrease; increase; increase; less b. Increase; increase; decrease; greater c. Increase; decrease; decrease; greater d. Decrease; increase; increase; less
1. Higher rates of inflation Select one: a. have no effect on real marginal tax rates, and no effect on savings and investment. b. reduce real marginal tax rates, reducing savings and investment. c. reduce real marginal tax rates, increasing savings and investment. d. increase real marginal tax rates, reducing savings and investment. 2. The money multiplier would increase with: Select one: a. a decrease in the level of Central Banks open-market purchases. b. a decrease in the monetary base. c. a decrease in the public's desired currency to checkable deposit ratio. d. a decrease in M1.
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1a. What is the proper objective function for monetary policy? b. How transparent should the central bank be? c. Should a central bank adopt formal inflation targeting? d. Should monetary policy be made by an individual or a committee? e. Should central banks also be bank supervisors?
4. According to Monetary neutrality and classical macroeconomics, the increase in money supply ________________________ (a) Increase the GDP deflator (b) decrease the GDP deflator (c) Increase real GDP (d) decrease real GDP (e) both GDP deflator and real GDP do not change
25. To make certain the acceptability of money, a government have to Group of answer choices a. Restrict its quantity relative to output. b. Create enough of it so people can purchase all the goods they want and need. c. Prevent the public from holding it for extended periods. d. Ensure it supply keeps pace with inflation. e. Back it with gold or silver.
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In an economy where the central bank implements negative interest rates as a monetary policy tool, what is the most likely short-term impact on consumer savings behavior and bank profitability? A. An increase in consumer savings as people seek to safeguard their money and a rise in bank profitability due to increased lending. B. A decrease in consumer savings as the incentive to save diminishes and a decrease in bank profitability due to lower interest margins. C. No significant change in consumer savings behavior but an improvement in bank profitability due to lower borrowing costs. D. A shift in consumer investment towards riskier assets and challenges in bank profitability due to compressed interest margins. Please don't use chatgpt it is giving wrong answer and please provide valuable answer
4. List two types of Monetary Authorities. b. Explain how they maintain the value of money. а.
7. Explain the tools of Monetary Policy. With a table and example?
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