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D Question 14 1 pts The fed cannot target both interest rate and money supply aggregates at the same time because, among others, All of
D Question 14 1 pts The fed cannot target both interest rate and money supply aggregates at the same time because, among others, All of these possible answers are correct statements The Fed can only control Money supply Md function dependent on interest rate changes and changes in nominal GDP The changes in Md function is not possible to control by the FedThe US Federal Government disbursed massive stimulus package of $2.2 trillion in late March 2020, followed by 2 more disbursement of $0.9 Trillion in Dec 2020 and $1.9 Trillion in March 2021 to recover the economy from severe recession caused by COVID-19 Global Pandemic. The funding of this stimulus package is done by 100% borrowing by selling the US treasury securities to the institutional bond investors, mostly the Wall Street investment bankers. The skyrocketing budget deficit added to public has reached up to $30 trillion. The potential crowding out effect from this massive borrowing money is caused by treasury bond price will fall and its yield (interest rates) is expected to rise Oall of these possible and/or mentioned here are expected to happen but not necessarily sure thing to happen. private investment is expected to fall due to growing uncertainty in near future with expected increase in Inflation Aggregate expenditure and output may fall due to rise in inflation and interest rateD Question 16 1 pts In response to severe economic downturn of the World economy including the US economy in March 2020 amid COVID-19, the effect of expansionary fiscal policy (with massive relief fund and rise in government expenditure) of stimulus package described in Q15 above) is the skyrocketing budget deficit. As a consequence, the conduct of deficit financing is usually carried out by (the federal Reserve), among others. buying treasury securities selling treasury securities increasing taxes @ decreasing government expenses
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