Preskoči na glavni sadržaj
Prijava
Sign up for FREE
arrow_back
Biblioteka

Resequence Fiscal and Monetary Policy-FOREX

star
star
star
star
star
Posljednje ažuriranje about 1 year ago
4 questions
1
Pitanje 1
1.

Government enacts expansionary fiscal policy......

Gov-->Loanable Funds Market-->AD-->Phillips........

  1. G is therefore borrowing more

  2. Dlf increases since the government needs loans OR Slf decreases since the banks are lending to the government

  3. PL decreases and Real Output decreases

  4. Interest sensitive spending (C+I) decreases

  5. UE increases

  6. AD decreases

  7. real interest rate increases

  8. G inc and T dec

1
1
1
Pitanje 2
2.

Central Bank Expansionary Monetary Policy

Central Bank-->MM-->Loanable Funds Market-->AD-->Phillips.....

  1. PL increases and Real Output increases

  2. Ms increases

  3. Interest sensitive spending (C+I) increases

  4. AD increases

  5. Slf increases

  6. Nominal interest rates decrease and Qm increases

  7. UE decreases

  8. Real interest rates decrease and Qlf increase

  9. Central Bank Buys Bonds

Pitanje 3
3.

Central Bank Contractionary Monetary Policy

Central Bank-->MM->Loanable Funds Market-->Investment-->Forex-->AD-->Phillips.....

  1. Nominal interest rates increase and Qm decreases

  2. AD decreases

  3. US EX decreases and IM increase

  4. NX decreases causing a current account deficit

  5. $ appreciates

  6. PL decreases and RGDP decreases

  7. Slf decreases

  8. Ms decreases

  9. S$ decreases OR D$ increases

  10. Central Bank Sells Bonds

  11. Foreign G/S are relatively less expensive AND Domestic G/S are relatively more Expensive

  12. Real interest rates increase and Qlf decrease

  13. UE increases

Pitanje 4
4.

Foreign Economy has an Inflationary Gap

Foreign Economy-->Forex-->Trade-->AD-->Phillips.....

  1. US G/S Relatively Less expensive and foreign G/S are relatively more expensive

  2. UE increases

  3. $ appreciates

  4. US AD decreases

  5. S$ decreases and D$ increases

  6. $ can buy more foreign currency and foreign currency can buy less $

  7. US EX decreases and IM increases

  8. Foreign Economy has high PL and high DI

  9. PL decreases and RGDP decreases

  10. US Nx decreases causing a Current Account deficit