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

Author Question: You have the assignment of making a recommendation to the Chairman of the Fed during a period of ... (Read 91 times)

washai

  • Hero Member
  • *****
  • Posts: 523
You have the assignment of making a recommendation to the Chairman of the Fed during a period of persistent, high inflation. What could you do to restore stable prices? What would you recommend instead if the problem was persistent high unemployment?

Question 2

Which of the following sentences about entrepreneurs stands true?
 a. They tend to be risk-averse individuals.
  b. They are more frequently found in societies that support social conformity.
  c. They help achieve technological progress.
  d. They are more frequently found in the local population of the developing countries.
  e. They usually belong to the traditional elite class.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

recede

  • Sr. Member
  • ****
  • Posts: 315
Answer to Question 1

In order to restore price stability (i.e., lower the rate of inflation) you could (1) sell government securities, (2) raise reserve requirements on bank deposits, (3) raise the discount rate, and/or (4) increase the interest rate the Fed pays on bank reserves.. You could also try to use moral suasion and urge banks to be more selective in making loans. This is all contractionary monetary policy. If the problem was persistent high unemployment, you would want to use expansionsary policy, which would reverse your policy recommendations--(1) buy government securities, (2) lower reserve requirements on bank deposits, (3) lower the discount rate, and/or (4) decrease the interest rate the Fed pays on bank reserves..

Answer to Question 2

c




recede

  • Sr. Member
  • ****
  • Posts: 315

 

Did you know?

In 1835 it was discovered that a disease of silkworms known as muscardine could be transferred from one silkworm to another, and was caused by a fungus.

Did you know?

A serious new warning has been established for pregnant women against taking ACE inhibitors during pregnancy. In the study, the risk of major birth defects in children whose mothers took ACE inhibitors during the first trimester was nearly three times higher than in children whose mothers didn't take ACE inhibitors. Physicians can prescribe alternative medications for pregnant women who have symptoms of high blood pressure.

Did you know?

Despite claims by manufacturers, the supplement known as Ginkgo biloba was shown in a study of more than 3,000 participants to be ineffective in reducing development of dementia and Alzheimer’s disease in older people.

Did you know?

Lower drug doses for elderly patients should be used first, with titrations of the dose as tolerated to prevent unwanted drug-related pharmacodynamic effects.

Did you know?

Signs and symptoms that may signify an eye tumor include general blurred vision, bulging eye(s), double vision, a sensation of a foreign body in the eye(s), iris defects, limited ability to move the eyelid(s), limited ability to move the eye(s), pain or discomfort in or around the eyes or eyelids, red or pink eyes, white or cloud spots on the eye(s), colored spots on the eyelid(s), swelling around the eyes, swollen eyelid(s), and general vision loss.

For a complete list of videos, visit our video library