Macroeconomics homework questions

QUESYION 1 Suppose additional government spending is financed by selling bonds to the general public. What will happen to the nation's monetary base Mo? the monetary base decreases the monetary base is unaffected the monetary base increases there is not enough information to determine what will happen to the monetary base question 2 An advantage of using monetary policy, rather than scal policy, to simulate the economy during a recession is the zero-lower bound on interest rates make it easier for the Fed to stimulate the economy. unlike the scal side of government, there isjust one person in charge of monetary policy at the Fed (the Fed Chairperson, in this case, Jerome Powell) so there is someone to blame if something goes wrong. the Federal Reserve never runs out of money. monetary policy impacts aggregate demand (AD) indirectly, while scal policy, such as stimulus spending, affects AD directly. monetary policy can be implemented relatively quickly, while implementing changes in scal policy takes more time. Question a "In recent Congressional testimony, the president's nominee for an opening on the Federal Reserve Board of Governors, Christopher Waters, indicated he favors a slow recovery, since, as he put it, 'the natural rate of unemployment may be higher than analysts currently predict.\" The rationale behind the suggestion that Federal Reserve policy should proceed cautiously rather than swiftly to move the US economy out of recession is that if the natural rate of unemployment is underestimated a recession could be created if the natural rate of unemployment is overestimated ination could be created if the natural rate of unemployment is underestimated inflation could be created if the natural rate of unemployment is overestimated a recession could be created