If the fed changes the money provide to match

Assignment Help Macroeconomics
Reference no: EM1338276

Money Supply vs Interest Rate Targets

(Money Supply Versus Interest Rate Targets)

Assume that the economy's real GDP is growing.

What will happen to money demand over time?

If the Fed leaves the money supply unchanged, what will happen to the interest rate over time?

If the Fed changes the money supply to match the change in money demand, what will happen to the interest rate over time?

What would be the effect of the policy described in part (c) on the economy's stability over the business cycle?

 

Reference no: EM1338276

Questions Cloud

Explain description of business models : Explain Description of business models and Imagine that you are a consultant for a start-up website company that collects information and resources on health and fitness
Investigate and analyse the effect of applying cmmi practice : ITECH3501- 6501 Principles of Software Engineering:  Investigate and analyse the effect of applying CMMI practices/processes in an Agile environment in terms of business performance improvement and the limitations/restrictions of using both, and writ..
Equity financing and debt financing : Explain, using examples, the differences between equity financing and debt financing. Name two types of long-term debt financing and list the relative advantages and disadvantages (to the borrower) of each.
Importance of charlemagne : Write a one-page paper and give details about the importance of Charlemagne to the Middle Ages.
If the fed changes the money provide to match : If the Fed changes the money provide to match the change in money demand, what will happen to the interest rate over time.
Out of control process : Which of the following patterns on an averages chart that displayed 25 sample averages would reveal an out of control process?
Computing cost savings and optimal order quantity yield : Other than cost savings, what benefit would using the optimal order quantity yield?
Explain analyzes the success of repeat entrepreneurs : Explain analyzes the success of repeat entrepreneurs and search for opportunities differently than entrepreneurs who found only one company
External equity ramifications : What are the advantages and disadvantages of letting the team administer discipline to a team member?

Reviews

Write a Review

Macroeconomics Questions & Answers

  Inflation targeting be a good policy

Why might it be difficult for the Fed to formally adopt inflation targeting?  Would inflation targeting be a good policy for the Fed in the present economic environment

  In using the taylor rule

In using the Taylor Rule as a guideline for monetary policy, what are the pros and cons of using forecasted values of inflation and output rather than observed values of these variables?

  Describe the present economic crisis situation in europe

Describe the present economic crisis situation in Europe.  Why has it been so difficult for the Europeans to find a solution to this problem?   Comment on what implications the crisis may have for the rest of the world if Europeans are not able to ag..

  Long-term federal government budget problems

Question:. Explain why there are long-term Federal government budget problems. Explain why the base-line forecast of the CBO is misleading.

  Derive and compare demand curve

Question based on Derive and compare demand curve,  Derive Ambrose's demand function for peanuts. How does it compare with Johnny's demand curve for peanuts?

  Problem based on utility function

Problem based on  Utility Function - Problem,  Answer and explain the following using a diagram which is completely labeled.

  Laffer curve : tax rate and tax revenue

Question based on Laffer Curve : Tax Rate and Tax Revenue,  Do raising tax rates necessarily raise tax revenue? What factors affect how tax revenue changes when tax rates change?

  Problem - income elasticity of demand

Problem - Income Elasticity of Demand,  Interpret the following Income Elasticities of Demand (YED) values for the following and state if the good is normal or inferior; YED= +0.5 and YED= -2.5

  Positive balance of payment

Question Positive Balance of Payment: "Things will look good for the US if we could just get to where we are consistently running a positive Balance of Payments."

  Effect of recession on the investment curve

Comment on the effect of a recession on the investment curve (only) and on the level of savings, investment, and the equilibrium real interest rate in the financial crisis that hits United States first starting in fall 2007.

  Affect of falling domestic investment on trade surplus and

How will a fall in domestic investment affect the trade surplus and net capital outflows in the domestic economy, the trade deficit and capital inflows in the rest of the world.

  Crises in the banking sector and bank run

Banking crises crisis decreases depositors' confidence in the banking system. What would be the effect of a rumor about a banking crisis on checkable deposits in such a country?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd