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 89 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?

Throughout history, plants containing cardiac steroids have been used as heart drugs and as poisons (e.g., in arrows used in combat), emetics, and diuretics.

Did you know?

Recent studies have shown that the number of medication errors increases in relation to the number of orders that are verified per pharmacist, per work shift.

Did you know?

In the United States, congenital cytomegalovirus causes one child to become disabled almost every hour. CMV is the leading preventable viral cause of development disability in newborns. These disabilities include hearing or vision loss, and cerebral palsy.

Did you know?

Opium has influenced much of the world's most popular literature. The following authors were all opium users, of varying degrees: Lewis Carroll, Charles, Dickens, Arthur Conan Doyle, and Oscar Wilde.

Did you know?

The first-known contraceptive was crocodile dung, used in Egypt in 2000 BC. Condoms were also reportedly used, made of animal bladders or intestines.

For a complete list of videos, visit our video library