This topic contains a solution. Click here to go to the answer

Author Question: Describe the channels by which monetary policy ripples through the economy and explain how each ... (Read 55 times)

danielfitts88

  • Hero Member
  • *****
  • Posts: 535
Describe the channels by which monetary policy ripples through the economy and explain how each channel operates.
 
  What will be an ideal response?

Question 2

In economics, the practical application of an invention is known as
 
  A) innovation. B) entrepreneurship. C) physical capital. D) technology.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

Anonymous

  • Sr. Member
  • ****
  • Posts: 317
Answer to Question 1

When the Federal Reserve lowers the federal funds rate, other short-term interest rates also fall. As a result, the exchange rate falls because investors decrease their demand for U.S. dollars since the interest yield on dollars is lower. When the Federal Reserve lowers the federal funds rate it does so by buying securities in the open market. Bank reserves increase so that banks have excess reserves. Because banks have excess reserves, they loan the excess. Loans increase and a multiple expansion of the quantity of money results. The supply of loanable funds increases so that the long-term real interest rate falls and consumption and investment increase. Net exports increase because of the lower exchange rate. All three of these changes increase aggregate demand, so that real GDP growth and the inflation rate both increase.

Answer to Question 2

A




danielfitts88

  • Member
  • Posts: 535
Reply 2 on: Jun 29, 2018
:D TYSM


Hdosisshsbshs

  • Member
  • Posts: 315
Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

 

Did you know?

In the ancient and medieval periods, dysentery killed about ? of all babies before they reach 12 months of age. The disease was transferred through contaminated drinking water, because there was no way to adequately dispose of sewage, which contaminated the water.

Did you know?

The first oncogene was discovered in 1970 and was termed SRC (pronounced "SARK").

Did you know?

Studies show that systolic blood pressure can be significantly lowered by taking statins. In fact, the higher the patient's baseline blood pressure, the greater the effect of statins on his or her blood pressure.

Did you know?

Drug-induced pharmacodynamic effects manifested in older adults include drug-induced renal toxicity, which can be a major factor when these adults are experiencing other kidney problems.

Did you know?

There are more sensory neurons in the tongue than in any other part of the body.

For a complete list of videos, visit our video library