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

Author Question: Suppose the central bank implements a monetary contraction that is fully expected by financial ... (Read 116 times)

Mr3Hunna

  • Hero Member
  • *****
  • Posts: 536
Suppose the central bank implements a monetary contraction that is fully expected by financial market participants. Given this information, we would expect
 
  A) stock prices to rise.
  B) stock prices to fall.
  C) stock prices to remain unchanged.
  D) an ambiguous effect on stock prices.
  E) stock prices to fall and the interest rate to rise.

Question 2

An open market sale of bonds by the central bank will cause which of the following when a liquidity trap situation exists?
 
  A) The interest rate will increase.
  B) The interest rate will not change.
  C) Output will decrease.
  D) The money supply, M, will not change.
  E) none of the above



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

yotaSR5

  • Sr. Member
  • ****
  • Posts: 331
Answer to Question 1

C

Answer to Question 2

E




Mr3Hunna

  • Member
  • Posts: 536
Reply 2 on: Jun 30, 2018
Great answer, keep it coming :)


LegendaryAnswers

  • Member
  • Posts: 341
Reply 3 on: Yesterday
Gracias!

 

Did you know?

The shortest mature adult human of whom there is independent evidence was Gul Mohammed in India. In 1990, he was measured in New Delhi and stood 22.5 inches tall.

Did you know?

If all the neurons in the human body were lined up, they would stretch more than 600 miles.

Did you know?

The ratio of hydrogen atoms to oxygen in water (H2O) is 2:1.

Did you know?

Limit intake of red meat and dairy products made with whole milk. Choose skim milk, low-fat or fat-free dairy products. Limit fried food. Use healthy oils when cooking.

Did you know?

Women are 50% to 75% more likely than men to experience an adverse drug reaction.

For a complete list of videos, visit our video library