Question

In: Economics

1. Explain whether the following statement is true or false. There is no mark for stating...

1. Explain whether the following statement is true or false. There is no mark for stating true or false; the mark is awarded for the explanation and the illustration only. Monetary policy consists of actions taken by the executive branch of government to control the nation's money supply

2. Explain whether the following statement is true or false. There is no mark for stating true or false; the mark is awarded for the explanation and the illustration only. Transfer payments are investments made by the government in capital equipment and infrastructure

3. When more money is in the financial system, then what happens to the prices of consumer goods?

(1 Point)

They stay the same

They go down

They go up

Can’t tell

Solutions

Expert Solution

As we know that, central bank plays an important role in an econnomy. The central bank influence the money supply in the economy by using it's monetary policy. The central bank does not fall under the executive branch of the government. It is governed by it's separate legislation. The ministry of finance have no influence in central bank.

The monetary policy as we know is enacted by central banks by manipulating the money supply in an economy. It often targeting inflation or the interest rate to ensure price stability and general trust in the currency.

1). The correct option is (False).

2). The correct option is (False).

The above statement is false.

Transfer Payments are the payments made by the government for which they didn't receive any benefit or revenue. It is a payment made or income received in which no goods or services are being paid for, such as a benefit payment or subsidy. The transfer Payments are old age pensions, unemployment benefits, job seekers allowance, welfare benefits for poor and so on.

3). The correct option is (b).

They go down.

As we know that when their is more money in the financial system the price of consumer goods will decrease.

Hope you got the answer.

Kindly comment for further explanation.

Thanks ?

Rahul Sunny answered 2 years ago
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