A. Question 14 Contractionary . lower unemployment in the short run, higher inflation in the long run. bailout. B. Cost-push inflation is described as too much money chasing too few goods.. Reserves - - Oversees the buying and selling of gov. Firms announce that they expect more layoffs next year than were previously anticipated. Select the proper policy recommendation or economic prediction for each of the following scenarios. Think of a problem or issue that concerns you. Decrease disposable income and slow down the economy. provides a larger incentive for firms to invest. ensuring that laws do not violate the Constitution. Which statement about executive orders is accurate? The Great Recession. component of aggregate demand, so this shifts aggregate demand to A. Which statement best describes contractionary monetary policy? Required Reserve = ? Which statement best describes monetary policy. Expansionary monetary policy that is destabilizing Expansionary monetary policy that . securities, which increases the amount of reserves in the banking systems and fuels deposit expansion. Which landmark case from the year 1803 established that the Supreme Court had the power of judicial review? - the long-term stability of Switzerland's economy, Suppose a wealthy family decides to move $50 million from their Swiss bank account to their Bank of America account. Then, a critical piece broke down. The Federal Reserve, which maintains reserve banks across the United States, is responsible for monetary policy. 2015 6%. Increasing individual tax rates through fiscal policy will most likely have which effect on the economy? By shifting aggregate demand, monetary policy can affect __________ and __________. Thirty college-bound students in Portland, Oregon, are asked about the field they would like to pursue in college. b. In a monetary economy there always has to be a double coincidence of wants. Contractionary Expansionary Fixed monetary policy involves decreasing the money supply. Expansionary Monetary Policy. - The Federal Reserve decreases the discount rate A country's _GDP- Gross Domestic Product_ is the total value of all final goods and services its people produce in one year. This raises the interest rate, which provides a lesser incentive for firms to invest. 1 An economy that grows more than 3% creates four negative consequences. According to the figure, expansionary monetary policy will cause an economy that is initially at full-employment output to go from equilibrium ______ to equilibrium ______ in the short run. 1. What is the first step toward becoming a U.S. Supreme Court judge, according to Article III of the Constitution? When the economy is __, the money leakage tends to rise; this tends to slow money creation. (round to one decimal place) Which risk do they run each day at The Fed is extremely transparent with regard to monetary policy and discloses goals, targets, and predictions for the macroeconomy. Which of the following best describes the effect on the SRAS curve if political negotiations result in a substantial decrease in the price of oil? Which of the following statements is NOT true regarding fiscal and monetary policy? Which phrase best describes the economy of the former Soviet Union and present-day North Korea? True or False: Which of the following ensures the right of workers to seek safety and health on the job without fear of punishment? B. the military Which phrase best describes the economy of the former Soviet Union and present-day North Korea? Data on GDP is release quarterly, meaning that an economic downturn beginning in January may not be identified until more than three months later. True or False: this target rate for Ionia, according to the Taylor rule. What level of government levies sales tax? - The ability to attract foreign direct investment As it relates to the European Union, what is the ECB? - Price level, Suppose that a central bank pursues expansionary monetary policy by purchasing bonds. Which issue is typically addressed by federal public policies? - Supply of money - Minting coin currency M1 is the narrowest definition of the money supply. monetary policy affects the aggregate demand curve in the aggregate Johnson was directly influenced by New Deal thinking. Open market operations, discount rate, and the reserve requirement. In the long run, the decrease in the money supply will cause the price level in the economy to __________ and real GDP to ___________. the loanable funds market. Contractionary fiscal policy features an increase in taxation and/or a decrease in spending in order to attempt to keep prices from rising too quickly. Because banks are in the business of lending money, they will ____ so savers don't need to. Which of the following statements best describes what occurs when monetary authorities sell government securities? She checks out the price tag and is excited to see that the dress is on sale and is now relatively cheaper than another dress she was considering. Output in the short-run is below the potential output of the economy. -Appointed by the president to serve 14 year terms Consider the graphs, which show aggregate supply (AS) and the change in aggregate demand (AD) from AD1 to AD2 that will result from the monetary policies. - Overseas national banking and consumer credit regulation, Board of Governors of the Federal Reserve System, Consider the various actions listed below that can be taken by the Federal Reserve System. (Refer to Quizlet Guide Picture #1), What are the bank's reserves in Table 2? Case of Banks Decreasing the Money They Lend Banks typically loan out a portion of customer deposits. This entity enforces rules and laws related to the stock market. d. Contractionary monetary policy directly puts money into the new.money. 2014 6% All Federal Reserve actions are subject to veto by the executive branch. - The Federal Reserve purchases bonds on the open market budget because the courts overturned key laws. Lower tax rates on interest earned from savings. It decreases the ability of brokers to trade stocks. Classify each of the variables listed by the policy's short run effect upon them. The ABC Toy Company makes a few types of toy cars on one of its production line. provides a lesser incentive for firms to invest. component of aggregate demand, so this shifts aggregate demand to What is an example of an item that would fall under mandatory spending? 2010 0% Business Economics Classify the actions described as examples of expansionary monetary policy (intended to stimulate the economy), contractionary or restrictive monetary policy (meant to slow down the economy), or not an example of monetary policy. Which of the following best describes an contractionary monetary policy? Printing more money will affect real GDP only in the short run because all prices do not adjust fully in the short run. However, everyone in the economy expects that exactly this amount (in present value) will have to be paid back in the future in the form of taxes. According to the permanent income hypothesis, which situations would result in an immediate increase in consumer spending, which would result in an immediate decrease in consumer spending, and which would result in no change in consumer spending? In many countries, one of the roles of the central bank it to provide loans to distressed financial institutions. There is an accompanying Practice Book and Teacher's Resource CD-ROM available separately. When the economy is growing too slowly (recession) or too quickly (high inflation), the two approaches the government can use, according to economists, include which of the following? The short run effects of quantitative easing are a(n) ________ in the price level with a long run ________ in the real value of money. What is included in the entry to record accrued interest expense? -Comprised of the Board of Governors and five regional bank presidents, Classify each of the tasks according to whether or not they are tasks of the Federal Reserve. What was historically significant about the Brown v. Board of Education decision, a product of the Warren Court? Contractionary monetary policy is when a central bank uses its monetary policy tools to fight inflation. Since then, 40 countries around the world have begun using some form of polymer banknotes. - A major credit card company lowers the interest rate on outstanding credit card balances Which type of agency would be most likely to focus on protecting the nation's borders? The law is removed and replaced with another law. Which phrase best defines the term policy? Which agency is charged with protecting and managing national monuments? You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Also note when the value of the good or service is included in GNP but not in GDP. The government has just lowered personal income taxes. 3. 2. changing the amount of money budgeted for government projects. Anyone can write the bill, but it has to be introduced by a member of Congress. The amount of time it takes for a policy to be implemented. What was Nixon's argument for not turning over the Watergate tapes? B. Changes in the money supply (M) will balance out with changes in prices (P). It limits the printing and circulation of new money. It's how the bank slows economic growth. Bill of 1944? M1 is the narrowest definition of the money supply. In the long run, ____________ prices adjust. Check all that apply. Which of these represents the federal government's first intervention in how U.S. businesses operate? Money represents anything that can be exchanged for goods and services or the: Money has three roles in an economy. - The ability to influence unemployment rates in the economy. Correct Answer: $900 Question 12 A decrease in the discount rate would: Correct Answer: increase bank borrowing of reserves and reflect an expansionary monetary policy. Label the scenarios with the type of monetary policy lag represented in each. True or False: (Refer to Quizlet Guide Picture # ) What is the simple money multiplier? You calculate that price elasticity of demand for this drug at the current market price is -1.4. Which cabinet level agency oversees the U.S. Classify the actions described as examples of expansionary monetary policy (intended to stimulate the economy), contractionary or restrictive monetary policy (meant to slow down the economy), or not an example of monetary policy. The interest rate of the Federal Reserve charges commercial banks for loans is the ______________. True or False: Compose a letter briefly describing the background of the problem.