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

Author Question: If the Fed orders a contractionary monetary policy, describe what will happen to the following ... (Read 84 times)

anshika

  • Hero Member
  • *****
  • Posts: 510
on: Jun 29, 2018
If the Fed orders a contractionary monetary policy, describe what will happen to the following variables relative to what would have happened without the policy:
 
  a. The money supply
  b. Interest rates
  c. Investment
  d. Consumption
  e. Net Exports
  f. The aggregate demand curve
  g. Real GDP
  h. The price level

Question 2

Comment on the following statement. Taxing externality-producing activities may not eliminate damages.
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

verrinzo

  • Sr. Member
  • ****
  • Posts: 346
Reply #1 on: Jun 29, 2018
Answer to Question 1

a. The money supply decreases
b. Interest rates rise
c. Investment decreases
d. Consumption decreases
e. Net exports decrease
f. The aggregate demand curve shifts to the left
g. Real GDP falls
h. The price level falls

Answer to Question 2

Taxes on these activities are not designed to eliminate externalities; they are simply meant to force decision makers to consider the full costs of their decisions. Even if we assume that a tax correctly measures all the damage done, the decision maker may find it advantageous to continue causing the damage.


anshika

  • Member
  • Posts: 510
Reply 2 on: Jun 29, 2018
Gracias!

Joy Chen

  • Member
  • Posts: 354
Reply 3 on: Yesterday
Great answer, keep it coming :)

« previous next »
 

Did you know?

There are 20 feet of blood vessels in each square inch of human skin.

Did you know?

Green tea is able to stop the scent of garlic or onion from causing bad breath.

Did you know?

Nitroglycerin is used to alleviate various heart-related conditions, and it is also the chief component of dynamite (but mixed in a solid clay base to stabilize it).

Did you know?

Approximately 15–25% of recognized pregnancies end in miscarriage. However, many miscarriages often occur before a woman even knows she is pregnant.

Did you know?

The first monoclonal antibodies were made exclusively from mouse cells. Some are now fully human, which means they are likely to be safer and may be more effective than older monoclonal antibodies.

Different gene orders give different double recombinants Different gene orders give different double recombinants
Booker T. Washington in his office at Tuskegee Institute, 1900. Washington chose a policy of accommo Booker T. Washington in his office at Tuskegee Institute, 1900. Washington chose a policy of accommo
Ecosystem goods and services and monetary values Ecosystem goods and services and monetary values
Describe how fat is digested, absorbed, and transported in the body Describe how fat is digested, absorbed, and transported in the body
Describe the Conceptual Forecasting Framework in your own words. Describe the Conceptual Forecasting Framework in your own words.
IMAGES THAT DESCRIBE CELLULAR PARTS IMAGES THAT DESCRIBE CELLULAR PARTS
Video: Frequency of stimulation and force (Recruitment of motor units and force)

For a complete list of videos, visit our video library