Economics Questions
Other
First, let me start off by saying that I have just been burned on likeplum. I now only have a day deadline because the person that I selected last week for this project stated that they could complete it. When I received the sample work it was incomplete (not all questions were answered) and it did not even sound like my native language (English). Please ensure that you answer every single questions. There are multiple questions for each problem.
Complete all questions listed below. Clearly label your answers.
1. What impact will an unanticipated increase in the money supply have on the real interest rate, real output, and employment in the short run?
How will expansionary monetary policy affect these factors in the long run?
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2. How rapidly has the money supply (M1) grown during the past twelve months?
State the rate of growth (use http://www.federalreserve.gov/releases/h6/) and the most recent release, use the seasonally adjusted figures.
Calculate the rate of growth across the year by taking the (new amount of M1- old amount of M1)/old amount of M1).
Given the state of the economy, should monetary authorities increase or decrease the growth rate of money? Explain why.
3. Is stability in the general level of prices through time important?
Why or why not?
Should price stability be the goal of monetary policy? Explain your responses.
4. Compare and contrast the impact of an unexpected shift to a more expansionary monetary policy under rational and adaptive expectations. Are the implications of the two theories different in the short run?
Are the long-run implications different? Explain.
