扩张性货币政策对济影响分析.pdfVIP

LONGFREE-RESPONSE

4SAMPLEQUESTIONS

AnswerstoSampleLongFree-ResponseQuestions

1.Supposetheeconomyisexperiencingrisingunemployment,slowingincreasesinrealGDPand

modestinflation.TheFederalReservedecidestofollowanexpansionary.

(A)Describewhatthismightinclude.TheFederalReservecouldbebuyingbondsonthe

openmarket,reducingthediscountrateorreducingthereserverequirement.Eachofthese

actionsisdesignedtostimulateaneconomythatisshowingsignsofenteringarecession.

(B)Iftheiseffective,exintheshort-runeffectitwouldhaveoneachofthefollowing:

(i)Interestrates

(ii)Privateinvestment

(iii)GDP

(iv)Employment

Theseactionswould

(i)reduceinterestrates.Moremoneyisavailableforloans,andthepriceofthismoneywould

fall.

(ii)Withlowerinterestrates,investmentandsomeconsumptionwouldincrease.

(iii)Withanincreaseininvestmentandconsumption,aggreedemandwillincreaseand

GDPwillincrease.

(iv)AsaresultoftheincreaseinaggreedemandandinGDP,employmentwillalso

increasetoproducethelargeroutput.