Econ

The main argument against using active policymaking is that Part 2 A. passive policymaking is destabilizing. B. foreign economies can easily counter the policy undertaken by the U.S. government or Fed. C. the Fed may offset fiscal policy. D. time lags make it very difficult to judge when the policy will have an effect.

time lags make it very difficult to judge when the policy will have an effect.

The Phillips curve shows​ that, in the​ short-run: Part 2 A. expected changes in aggregate demand produce a positive relationship between inflation and unemployment. B. expected changes in aggregate demand produce an inverse relationship between inflation and unemployment. C. unexpected changes in aggregate demand produce a positive relationship between inflation and unemployment. D. unexpected changes in aggregate demand produce an inverse relationship between inflation and unemployment. Your answer is correct. Suppose people expect the inflation rate to be 3 percent. The government engages in a​ one-time expansionary monetary policy in order to lower unemployment. Once people realize what has happened A. the Phillips curve will shift​ outward, causing unemployment to return to its natural rate. Your answer is correct. B. there will be a movement along the Phillips​ curve, causing the inflation rate to return to 3 percent. C. there will be a movement down along the Phillips​ curve, causing unemployment to return to its original level. D. the Phillips curve will shift​ inward, causing unemployment to return to its natural rate.

unexpected changes in aggregate demand produce an inverse relationship between inflation and unemployment. ' the Phillips curve will shift​ outward, causing unemployment to return to its natural rate. Your answer is correct.

The natural rate of unemployment in the U.S. Part 2 A. is equal to frictional unemployment plus cyclical unemployment. B. is the rate of unemployment that exists in the long run after everyone in the economy has fully adjusted to changes that have occurred. Your answer is correct. C. has increased steadily and with out interruption since the conclusion of World War II. D. is equal to cyclical unemployment plus structural unemployment. Part 3 The actual rate of unemployment is Part 4 A. less than the natural rate of unemployment when cyclical unemployment is positive. B. always equal to the natural rate of unemployment. C. greater than the natural rate of unemployment when cyclical unemployment is positive. Your answer is correct. D. greater than the natural rate of unemployment when cyclical unemployment is zero.

1. Is the rate of unemployment that exists in the long run after everyone in the economy has fully adjusted to changes that have occurred. Your answer is correct. 2. greater than the natural rate of unemployment when cyclical unemployment is positive. Your answer is correct.

Read through the descriptions below to correctly match the action and the type of policy undertaken. Part 2 A. Active policy​ making: The U.S. progressive tax​ system; Passive policy​ making: A decrease in the marginal tax rates approved by Congress and the President. B. Active policy​ making: Fed buying U.S. government securities in response to a​ recession; Passive policy​ making: Unemployment compensation paid out by the government. Your answer is correct. C. Active policy​ making: Unemployment compensation paid out by the​ government; Passive policy​ making: Fed buying U.S. government securities in response to a recession. D. Active policy​ making: Fed buying U.S. government securities in response to a​ recession; Passive policy​ making: Congress increasing government spending.

Active policy​ making: Fed buying U.S. government securities in response to a​ recession; Passive policy​ making: Unemployment compensation paid out by the government. Your answer is correct.

Suppose that the economy is currently in​ long-run equilibrium. Which of the following would be likely to cause a​ short-run decrease in the unemployment rate relative to the natural​ rate? A. A contractionary fiscal policy that was not fully anticipated B. A permanent decrease in the minimum wage C. An expansionary monetary policy that was not fully anticipated Your answer is correct. D. An increase in union membership

An expansionary monetary policy that was not fully anticipated Your answer is correct.

The bond market is depicted in the graph to the right. Part 2 a. The supply curve of bonds is drawn vertically because Part 3 A. the price of bonds is influenced by interest rates and the graphs do not include interest rates. B. the Fed is buying or selling bonds in order to set the price of the bond. C. government bonds do not bear interest. D. the​ Fed's decision to buy or sell bonds is independent of bond prices. Your answer is correct. Part 4 b. Suppose that the Fed decides to sell bonds. ​1.) Using the line drawing tool​, draw the changes in the bond market and the label the new line ​'S Subscript 1​'. ​2.) Using the point drawing tool​, find and label the new equilibrium point ​'E Subscript 1​'. Part 5 Carefully follow the instructions​ above, and only draw the required objects.

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The economy is depicted by the graph to the right. It is presently operating at point A. Suppose that the central bank attempts to expand the economy through purchasing US government securities. ​1.) Using the line drawing and or the​ 3-point curved line drawing tools​, show the effect of this​ shock, assuming the policy is not anticipated by the public. Properly label your new curve or curves. ​2.) Using the point drawing tool​, identify the new ​short-run equilibrium point. Label this point ​'​H'. Carefully follow the instructions​ above, and only draw the required objects.

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The economy is currently in a​ long-run equilibrium as depicted to the right. Suppose the U.S. economy experiences deteriorization of its power grid. Show the new long run equilibrium in the economy from the perspective of the real business cycle model. by drawing the​ following: ​1.) Using the line drawing tool​, draw the new LRAS. Label this line ​'LRAS Subscript 1​'. ​2.) Using the​ 3-point curved line drawing tool​, draw the new SRAS. Label this curve ​'SRAS Subscript 1​'. ​3.) Using the point drawing tool​, identify the​ long-run equilibrium point. Label this point​ 'X'. Carefully follow the instructions​ above, and only draw the required objects.

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Suppose there is a​ $1 trillion increase in the money supply that causes the aggregate demand curve to shift rightward. If people do not anticipate the increase in the money​ supply, in the short​ run, the​ short-run supply curve A. shifts leftward immediately. B. becomes horizontal. C. shifts rightward immediately. D. does not shift. Your answer is correct. In the short​ run, there is a movement from A. C to B. B. B to C. C. A to C. D. A to B. Your answer is correct. Part 3 In the long​ run, there is A. movement from A to C. B. movement from C to B. C. movement from B to C. Your answer is correct. D. no further change.

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Question content area left In the figure to the​ right, we can conclude that prices are A. sticky so that the AD curve is downward sloping. B. not sticky so that the SRAS curve is horizontal. C. not sticky so that the AD curve is downward sloping. D. sticky so that the SRAS curve is horizontal. Your answer is correct. Suppose that initially the economy is producing at point A. Move the cursor to show the ​short-run effect of a fall in aggregate demand from AD Subscript 1 to AD Subscript 2.

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Using the line drawing tool​, draw a money demand curve on the graph indicating the relationship between the interest rate and the opportunity cost of holding money. Label the curve M Subscript d. Carefully follow the instructions​above, and only draw the required objects.

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Consider the figure to the right. Suppose that instructions in the latest FOMC Directive call for a monetary policy action aimed at pushing down the rate of interest prevailing in the economy. Use the figure to assist in explaining whether officials at the Federal Reserve Bank of New​ York's Trading Desk should buy or sell existing bonds. Part 2 ​1.) Using the line drawing​ tool, draw either a new demand curve ​(D2​) or a new supply curve ​(S2​) that shows how the Trading​ Desk's buying or selling of existing bonds could push down the prevailing rate of interest. Properly label your line. ​2.) Using the point drawing tool​, indicate the new equilibrium price and quantity. Label this point ​'E2​.' Carefully follow the instructions​ above, and only draw the required objects. Part 3Since the market price of existing bonds and the rate of interest are inversely ​related, an open market Purchase of bonds by the Fed raises the price of bonds and reduces the interest rate prevailing in the economy.

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Consider the figure to the right. Suppose that instructions in the latest FOMC Directive call for a monetary policy action aimed at inducing individuals and businesses to demand a smaller quantity of money. Use the figure to assist in explaining whether officials at the Federal Reserve Bank of New​ York's Trading Desk should buy or sell bonds. Part 2 ​1.) Using the line drawing​ tool, draw either a new demand curve ​(D2​) or a new supply curve ​(S2​) that shows how the Trading​ Desk's buying or selling of existing bonds could induce individuals and businesses to demand a smaller quantity of money. Properly label your line. ​2.) Using the point drawing tool​, indicate the new equilibrium price and quantity. Label this point ​'E2​.' Carefully follow the instructions​ above, and only draw the required objects. Part 3Since the market price of existing bonds and the rate of interest are inversely ​related, an open market sale of bonds by the Fed lowers the price of​ bonds, raises the interest rate prevailing in the​ economy, and reduces the quantity of money demanded.

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If inflationary expectations​ rise, the Phillips curve A. becomes steeper. B. shifts down. C. shifts up. Your answer is correct. D. becomes flatter.

Shifts up

The economy is depicted by the graph to the right. It is presently operating at point A. Suppose that the central bank attempts to expand the economy through purchasing US government securities. ​1.) Using either the line drawing or the​ 3-point curved line drawing tool​, show the effect of the central​ bank's purchases of government securities on the economy. Properly label your line. ​2.) Using either the line drawing or the​ 3-point curved line drawing tool​, show the effect on the economy such that this policy is fully anticipated by the public. Properly label your curve. ​3.) Using the point drawing tool​, indicate the new equilibrium point. Label this point​ 'B'. Carefully follow the instructions​ above, and only draw the required objects.

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The type of policy making that is not in response to actual or potential changes in overall economic activity is called A. discriminatory policy making. B. passive policy making. Your answer is correct. C. discretionary policy making. D. active policy making.

passive policy making.