Ecs Questions

ECS1300/01 Seminar 8 Chapters 22-23 1. If the economy faces a situation where actual create is little than potential output, what is the Central Banks (Bank of England) monetary indemnity response likely to be in this situation? diminish stake rate (discount rate) buy bonds from the private banks in the ease up marketplace operation (reverse-repo) decrease reserve requirement 2. If the economy faces a situation where actual output is more than potential output and pomposity is increasing, and thus the Central Banks (Bank of England) wanted to use monetary policy to reduce the level of requisite within the economy what policies could be used? increase pursuance rate (discount rate) Sell bonds to the private banks in the open market operation (repo) increase reserve requirement Chapter 26 3. The follo move ong table gives the apprize of the consumer price index for 2000 through 2007. Consumer Price Index portionage increase 2000172.2 2001177.1 2002179.9 2003184.0 2004188.9 2005195.3 2006201.6 2007207.3 i) Calculate the rate of inflation (percentage increase in prices) for each year. ii) What was the inflation rate in 2001? iii) What was the inflation rate in 2005?

iv) In what year was the inflation rate the highest? The lowest? 4. If token(a) interest rate is 4% and inflation rate is 2%, what is the real interest rate? Suppose that the nominal interest rate doesnt change and inflation rises to 3%. and so what happens to the real interest rate? 5. Suppose the annual inflation rate has been 3 percent for several years. Then, without warning, it soars to 10 percent a year. Will each of the following individuals or businesses win or lose from such unexpected inflation? i) A tenant take aiming an apartment with a lease that fixes the rent for the next 3 years. ii) An automobile dealer who has leased a car to a buyer for 3 years with bushel payments. iii) A bank that... If you want to get a across-the-board essay, order it on our website: Ordercustompaper.com

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