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Kay [80]
2 years ago
10

A monetary growth rule means that :__________a) the Fed will raise interest rates if it thinks the economy is growing faster tha

n potential. b) the Fed will lower interest rates if it thinks a recession is on the horizon. c) the money supply should grow in response to economic conditions. d) the money supply should grow at a constant rate.
Business
1 answer:
Mkey [24]2 years ago
5 0

Answer:

d) the money supply should grow at a constant rate.

Explanation:

The Federal Reserve System (popularly referred to as the 'Fed') was created by the Federal Reserve Act, passed by the U.S Congress on the 23rd of December, 1913. The Fed began operations in 1914 and just like all central banks, the Federal Reserve is a United States government agency.

Generally, the Fed controls the issuance of currency in United States of America: it promotes public goals such as economic growth, low inflation, and the smooth operation of financial markets.

Monetary growth rule is a theory that was proposed by Friedman and it states that the Federal Reserve System (Fed) should be required to set or target the money supply growth rate to be equal to the growth rate of Real gross domestic product (GDP) each year and leaving the price level of goods and services unchanged.

Basically, this growth rate of gross domestic product (GDP) is usually set between 1% and 4%. Also, the monetary growth rule is also referred to as the K-Percent rule.

Hence, a monetary growth rule means that the money supply should grow at a constant rate.

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Answer:

Condition of Deadlock

Explanation:

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What is the primary characteristic that differentials a zero based budget from a conventional budget. A. A zero based budget doe
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Answer:

B. The zero based budget requires managers to re-justify every planned expenditure every year.

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What is the reason it's better to underestimate your income instead of overestimating when creating your budget?
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Answer:

  • <em>Underestimating your income is a conservative and healthy measure that can avoid financial problems.</em>

Explanation:

<em>Underestimating</em> your <em>income</em> is a conservative and healthy measure, such as it is overestimating your expenses.

Specially when your income is variable iit can be hard to predict. You will be safer both if your income lowers or your unpredictable expenses increase.

There are many unpredictable situations that could put you in a difficult situation: a disease, a natural disaster, the need to help a family member or friend in trouble. If any of these unfortunate circumstances arises and your budget is too tight, you could see yourself in financial trouble.

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It is better to be cautious than to regret later!

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3 years ago
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