under what conditions is monetary policy most effective? a
liquidity trap
a steep LM and relatively flat IS
a steep IS and relatively flat LM
steep IS and LM
President Franklin D. Roosevelt enacted the New Deal in 1933.
What was this policy?
aggressive fiscal policy designed to provide relief, reform and
recovery from the Great Depression
An act to preserve the laissez-faire approach to government's
role in markets.
a policy designed to reduce competition from foreign
exporters
an offer...
What are the main tools of the monetary policy? What does
quantitative easing mean? What does "monetize the deficit mean? Why
is it important in discussions of fiscal policy? Use an appropriate
diagram to illustrate your answer.
What does it mean to "Provide Liquidity"? More specifically what
does it mean to provide liquidity to a market? Please also explain
how banks provide liquidity and why this is important?
LIQUIDITY TRAP
Some economists advocate for fixing the exchange rate for
economies in a liquidity trap. Specifically, they recommend pegging
the exchange rate at a depreciated level (higher than the upper
bound SMAX). Using the DD-AA model, show how to escape
from a liquidity trap using a fixed exchange rate.
What policy instruments does the Fed use for the
monetary policy?
What are the pros and cons of using expansionary and
contractionary monetary policy tools under the following scenarios:
depression, recession, inflation, and robust economic growth? Which
do you think is more appropriate today?