1 answer

15. (4 points) The Taylor Principle states that central banks raise nominal rates by than any...

Question:


15. (4 points) The Taylor Principle states that central banks raise nominal rates by than any rise in expected inflation so t
15. (4 points) The Taylor Principle states that central banks raise nominal rates by than any rise in expected inflation so that real interest rates when there is a rise in inflation. A) less; rise B) more; fall 9 less; fall D) more; rise 16. (4 points) When the financial crisis started in August 2007, inflation was rising and the Fed began an aggressive easing lowering of the federal funds rate, which indicated that A) there was an upward movement along the monetary policy curve. B) there was a downward movement along the monetary policy curve. C) the monetary policy curve shifted upward. D) the monetary policy curve shifted downward. 17. (4 points) An autonomous easing of monetary policy will cause A) the quantity of aggregate demand to increase. B) the quantity of aggregate demand to decrease. C) aggregate demand to decrease. D) aggregate demand to increase. 18. (4 points) The aggregate supply curve shows the relationship between A) the level of inputs and aggregate output. B) the inflation rate and the level of inputs. C) the wage rate and the level of employment. D) the inflation rate and the level of aggregate output supplied. 19. (4 points) The long-run aggregate supply curve is a vertical line passing

Answers

15.) Option D is correct i.e. more, rise

16.) Option D is correct i.e the monetary policy curve shifted downward.

Reason :- It seems Fed is using an autonomous easing of monetary policy which shifts the monetary policy curve downward.

17.) Option D is correct i.e. aggregate demand to increase.

Reason :- In autonomous easing of monetary policy, the curve shifted downward which shows aggregate demand increase.

18.) Option D is correct i.e. Inflation rate and the level of aggregate output supplied.

Reason :- The aggregate supply curve shows rhe relationship between aggregate price level and the quantity of aggregate output in the economy.

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