As a member of the FOMC, Write a directive to the committee about the conduct of monetarybpolicy over the next two months. Your directive may address a target for GDP growrh rate, the federal funds rate, and the rate of inflation.
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- List four argumnets that favor a central Bank that is brought under the control of govermentWhen the inflation rate increases, what happens to thefederal funds rate? Operationally, how does the Fedadjust the federal funds rate?How does Stephanie Kelton’s explanation of Modern Monetary Theory4 (MMT) affect your view of government spending? Provide specific examples and describe how MMT contributes to your understanding.
- What happens when the government uses it's overdraft facilities at the central bankWhat action did the FOMC take, if any, regarding the level of the fedfunds rate? Why did it make this choice?28) When the Fed raises the federal funds rate A) the value of the dollar rises on the foreign exchange market. B) consumption increases. C) net exports increase. D) the value of the dollar falls on the foreign exchange market. 29) An inflation rate targeting rule A) reduces uncertainty about monetary policy. B) means that the inflation rate must exceed 5 percent in order for the rule to be effective. C) has been adopted the by the Fed in response to the financial crisis of 2008-2009. D) will not work if the Fed continues to sue open market operations.
- Predict how possible changes in monetary and/or fiscal policy may impact the supply and demand of the iPhone.A6 Explain, using diagrams, how keynesian monetary transmission works if there is a decrease in money supply.SUBMISSION IS DUE ON WEDNESDAY, 4th AUGUEST 2021. EMAIL YOUR SUBMISSIONS TO: jwappiahkubi@ug.edu.gh The commodity market for a simple economy is in equilibrium and when Y = C + 1 + G. The money market is in equilibrium when the supply of money (M) equals Demand for money (Md). Demand for money composes of transaction- precautionary demand for money (Mt) and the speculative demand for money (Ms). Assume the economy is characterised by the following information. C = 4800 + 0.8Yd T = 100, | = 1900 - 75i, G = 4000, M = 5000, Mt = 0.3Yd Ms = 100 – 15i a) Derive an expression to show the IS function b) Derive the LM function c) What values of Income and Interest rate provides for both the goods market and money market equilibrium in this economy d) Sketch the IS and LM curves for this economy. e) Outline four factors that cause a shift in the IS curve. Page 1 of 1
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