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

Author Question: The inflation rate in Genovia has been rising constantly. What can the central bank of the country ... (Read 50 times)

FButt

  • Hero Member
  • *****
  • Posts: 519
on: Jun 30, 2018
The inflation rate in Genovia has been rising constantly. What can the central bank of the country do to control inflation?
 
  What will be an ideal response?

Question 2

An increase in bond prices will most likely result in
 
  A) a decrease in the quantity demanded of money.
  B) an increase in the quantity demanded of money.
  C) an increase in the opportunity cost of holding money.
  D) an increase in interest rates.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

softEldritch

  • Sr. Member
  • ****
  • Posts: 334
Reply #1 on: Jun 30, 2018
Answer to Question 1

The central bank of Genovia should reduce the quantity of bank reserves deposited at the central bank by selling government bonds to private banks. This will lead to an increase in the federal funds rate which will in turn lead to an increase in the long-term interest rate. As a result, both consumption and investment will fall. A fall in consumption and investment leads to a decrease in aggregate demand. As a result, the aggregate price level will fall.

Answer to Question 2

B


FButt

  • Member
  • Posts: 519
Reply 2 on: Jun 30, 2018
Great answer, keep it coming :)

bitingbit

  • Member
  • Posts: 323
Reply 3 on: Yesterday
Excellent

« previous next »
 

Did you know?

Vital signs (blood pressure, temperature, pulse rate, respiration rate) should be taken before any drug administration. Patients should be informed not to use tobacco or caffeine at least 30 minutes before their appointment.

Did you know?

Today, nearly 8 out of 10 pregnant women living with HIV (about 1.1 million), receive antiretrovirals.

Did you know?

A strange skin disease referred to as Morgellons has occurred in the southern United States and in California. Symptoms include slowly healing sores, joint pain, persistent fatigue, and a sensation of things crawling through the skin. Another symptom is strange-looking, threadlike extrusions coming out of the skin.

Did you know?

Many people have small pouches in their colons that bulge outward through weak spots. Each pouch is called a diverticulum. About 10% of Americans older than age 40 years have diverticulosis, which, when the pouches become infected or inflamed, is called diverticulitis. The main cause of diverticular disease is a low-fiber diet.

Did you know?

Bacteria have flourished on the earth for over three billion years. They were the first life forms on the planet.

The role of leptin in regulating appetite and metabolic rate. The role of leptin in regulating appetite and metabolic rate.
Changes in the abundance and egg-hatching success rate of prairie chickens. Changes in the abundance and egg-hatching success rate of prairie chickens.
Rotation Rotation–Moving a body part around a central axis. Rotation Rotation–Moving a body part around a central axis.
(a) Chimpanzees and (b) bonobos likely diverged from a common ancestor due to allopatric speciation (a) Chimpanzees and (b) bonobos likely diverged from a common ancestor due to allopatric speciation
Increasing access to care for teen mothers is important because they have a higher rate of pregnancy ... Increasing access to care for teen mothers is important because they have a higher rate of pregnancy ...
Refraction and the Setting or Rising Sun Refraction and the Setting or Rising Sun
Video: Action potentials - electrical characteristics and generation

For a complete list of videos, visit our video library