subject
Business, 19.05.2020 22:08 Bowied6025

Neverland is experiencing an economic boom and is growing very fast. Stock and housing prices are surging, unemployment is very low and inflation starts to pick up. Policymakers are worried that the economy is overheated and is heading towards a recession. In Neverland, the central bank is responsible for monetary and exchange-rate policy, while the treasury is responsible for fiscal policy. They hire you as a consultant to help them design economic policy. One day you meet with the governor of the central bank, and you both agree that the interest rates are too low, and it is necessary to increase them to cool down asset markets and curb inflation. You advise that the central bank should increase the policy interest rate from the current 4%. The governor agrees with your suggestion and asks you to use the following Taylor rule to set the new interest rate:

ansver
Answers: 3

Another question on Business

question
Business, 21.06.2019 21:30
Peninsula products has just applied for a loan at your bank. when reviewing peninsula's books for the year that just ended, you notice that the firm uses the fair value option for its bonds payable. you also see that the firm recorded a $55,000 debit in its bonds payable account and a $55,000 credit in its unrealized holding gain or loss"income account. over that same period, interest rates decreased by about 0.5 percent. how should this information affect the bank's decision as to whether to grant peninsula a loan? a : the bank should strongly consider giving a loan to peninsula because the changes in firm's bonds payable and unrealized holding gain or loss"income accounts suggest that peninsula has seen an increase in its credit rating over the past year. b : the bank should put little emphasis on the changes in peninsula's bonds payable and unrealized holding gain or loss"income accounts because these changes are likely the result of the rise in interest rates. c : the bank should hesitate before giving a loan to peninsula because the changes in firm's bonds payable and unrealized holding gain or loss"income accounts suggest that peninsula has seen a decline in its credit rating over the past year. d : the bank should put little emphasis on the changes in peninsula's bonds payable and unrealized holding gain or loss"income accounts because these changes are likely unrelated to either interest rates or the firm's credit rating.
Answers: 2
question
Business, 22.06.2019 07:00
Amarket that consists of all possible consumers regardless of their specific needs or wants is a
Answers: 1
question
Business, 22.06.2019 11:20
Money aggregates identify whether each of the following examples belongs in m1 or m2. if an example belongs in both, be sure to check both boxes. example m1 m2 gilberto has a roll of quarters that he just withdrew from the bank to do laundry. lorenzo has $25,000 in a money market account. neha has $8,000 in a two-year certificate of deposit (cd).
Answers: 3
question
Business, 22.06.2019 22:20
Who owns a renter-occupied apartment? a. the government b. a landlord c. the resident d. a cooperative
Answers: 1
You know the right answer?
Neverland is experiencing an economic boom and is growing very fast. Stock and housing prices are su...
Questions
question
Mathematics, 16.12.2020 19:20
question
Mathematics, 16.12.2020 19:20
question
Mathematics, 16.12.2020 19:20
question
Mathematics, 16.12.2020 19:20
Questions on the website: 13722363