This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Explain fiscal dominance. What will be an ideal response?[br][br][b][color=red]Question ... (Read 49 times)

SO00

  • Hero Member
  • *****
  • Posts: 568
on: Jun 30, 2018
Explain fiscal dominance.
 
  What will be an ideal response?

Question 2

A reduction in money growth, holding all other factors constant, will cause
 
  A) a reduction in seignorage.
  B) an increase in seignorage.
  C) no change in seignorage.
  D) an ambiguous effect on seignorage.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

Pamela.irrgang@yahoo.com

  • Sr. Member
  • ****
  • Posts: 323
Reply #1 on: Jun 30, 2018
Answer to Question 1

Most of the time, fiscal and monetary policies proceed independently. The government finances its deficit through borrowing. The central bank chooses the supply of money so as to achieve its objective (for example, low inflation). But, when the fiscal situation is bad, either because deficits are large or debt is high, and the interest rate faced by the government is high, it becomes increasingly tempting for the government to want to finance itself through money finance. Fiscal policy then determines the behavior of the money supply, a case known as fiscal dominance.

Answer to Question 2

A


SO00

  • Member
  • Posts: 568
Reply 2 on: Jun 30, 2018
YES! Correct, THANKS for helping me on my review

Dnite

  • Member
  • Posts: 297
Reply 3 on: Yesterday
Gracias!

« previous next »
 

Did you know?

People who have myopia, or nearsightedness, are not able to see objects at a distance but only up close. It occurs when the cornea is either curved too steeply, the eye is too long, or both. This condition is progressive and worsens with time. More than 100 million people in the United States are nearsighted, but only 20% of those are born with the condition. Diet, eye exercise, drug therapy, and corrective lenses can all help manage nearsightedness.

Did you know?

Parkinson's disease is both chronic and progressive. This means that it persists over a long period of time and that its symptoms grow worse over time.

Did you know?

Elderly adults are living longer, and causes of death are shifting. At the same time, autopsy rates are at or near their lowest in history.

Did you know?

About 3.2 billion people, nearly half the world population, are at risk for malaria. In 2015, there are about 214 million malaria cases and an estimated 438,000 malaria deaths.

Did you know?

As many as 20% of Americans have been infected by the fungus known as Histoplasmosis. While most people are asymptomatic or only have slight symptoms, infection can progress to a rapid and potentially fatal superinfection.

Empathy draws a more positive response from the patient because it is based on the willingness of th Empathy draws a more positive response from the patient because it is based on the willingness of th
The Cells of the Innate Response The Cells of the Innate Response
How to plot a sine function containing an amplitude and phase-shift (Question 2 of 3) How to plot a sine function containing an amplitude and phase-shift (Question 2 of 3)
Find derivative by using definition of the derivative question 2 Find derivative by using definition of the derivative question 2
Economics question Economics question
chem question chem question
Video: Mechanisms for chromosome movement Animation

For a complete list of videos, visit our video library