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vampirchik [111]
2 years ago
6

Suppose a self-regulating economy is in a recessionary gap at the time the Fed enacts expansionary monetary policy. Furthermore,

suppose the Fed is able to enact expansionary monetary policy in such a precise way that the economy moves from a recessionary gap into long-run equilibrium, if there are no other changes in the economy. The combination of expansionary monetary policy and a self-regulating economy will cause
Business
1 answer:
anzhelika [568]2 years ago
8 0

The combination of expansionary monetary policy and a self-regulating economy will cause real GDP will rise to the level above natural real GDP and the recessionary gap would hence turn into an inflationary gap situation.

<h3>What do you mean by monetary policy?</h3>

Monetary Policy refers to the control of the quantity of money available in an economy through which new money is supplied.

The self-regulating economy experiences a recessionary gap. The real GDP is less than the level of natural real GDP. The gap is been corrected by the rightward shift in the short-run aggregate supply curve.

Due to interplay, real GDP will rise to the level above natural real GDP and the recessionary gap turn into an inflationary gap.

Learn more about Monetary policy here:

brainly.com/question/3817564

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Answer:

c. rise, interest rates to rise, and the dollar to appreciate

Explanation:

7 0
3 years ago
The Higgins Company has just purchased a piece of equipment at a cost of $120,000. This equipment will reduce operating costs by
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Answer:

B. 2.8 years

Explanation:

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Yr 2 cash inflow = 40,000, hence net CF = 40,000- 72,000 = -32,000

Yr 3 cash inflow = 40,000, hence net CF = 40,000-32,000 = 12,000

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= 2.8 years

3 0
3 years ago
Which one of the following forms is used in connection with registration of securities of a small reporting company with $25 mil
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Explanation:

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4 0
3 years ago
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luda_lava [24]

Answer: Option (C) is correct.

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Correct Option: Political business cycle

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(i) Regime A consist of expansionary polices which results in a economic growth and inflation. If the inflation rate is high enough then there is a withdrawal of policy.

(ii) Regime B consist of contractionary polices which results in reducing economic growth and inflation. It will become voted out if the unemployment is too high, replaced by Regime A. It generally lead to downward movement of the cycle.

7 0
3 years ago
What are some of the things that japan produces?
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Japan produces many things. They produce many popular video games, foods, and toys. 
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3 years ago
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