Questions from General Economics

Q: Refer to the accompanying table for Moola to answer the following questions

Refer to the accompanying table for Moola to answer the following questions. What is the equilibrium interest rate in Moola? What is the level of investment at the equilibrium interest rate? Is ther...

Q: By what chain of causation does the ECB think negative interest rates

By what chain of causation does the ECB think negative interest rates will stimulate the economy? If the Fed manages to raise interest rates up to historical levels before the next recession, will it...

Q: What is the basic determinant of (a) the transactions

What is the basic determinant of (a) the transactions demand and (b) the asset demand for money? Explain how these two demands can be combined graphically to determine total money demand. How is th...

Q: What is the basic objective of monetary policy? What are the

What is the basic objective of monetary policy? What are the major strengths of monetary policy? Why is monetary policy easier to conduct than fiscal policy?

Q: How does the problem of limited and bundled choice in the public

How does the problem of limited and bundled choice in the public sector relate to economic efficiency? Why are public bureaucracies possibly less efficient than firms?

Q: If the demand for a firm’s output unexpectedly decreases, you would

If the demand for a firm’s output unexpectedly decreases, you would expect that its inventory would: LO4 a. Increase. b. Decrease. c. Remain the same. d. Increase or remain the same, depending on whet...

Q: Distinguish between the federal funds rate and the prime interest rate.

Distinguish between the federal funds rate and the prime interest rate. Why is one higher than the other? Why do changes in the two rates closely track one another?

Q: Distinguish between how the Fed would have to undertake restrictive monetary policy

Distinguish between how the Fed would have to undertake restrictive monetary policy today versus before the mortgage-debt crisis. What actions would it need to take in each case?

Q: Suppose that you are a member of the Board of Governors of

Suppose that you are a member of the Board of Governors of the Federal Reserve System. The post-2008 economy is experiencing a sharp rise in the inflation rate. What change in the federal funds rate w...

Q: Explain the links between changes in the nation’s money supply, the

Explain the links between changes in the nation’s money supply, the interest rate, investment spending, aggregate demand, real GDP, and the price level.