You Are the Governor of the Central Bank of Atlantis

question 19

Essay

You are the governor of the Central Bank of Atlantis.You believe in a Keynesian model of the economy,and your goal is to keep the economy at the full-employment level of output.How would you respond (tightening or easing policy)in each of the following cases?
a.Government purchases increase.
b.Corporate tax rates increase.
c.Expected inflation increases.
d.There's a beneficial oil price shock (and the LM curve shifts more to the right than the FE line).

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Definitions:

Technology Barrier

Obstacles that hinder the adoption, implementation, or effective use of technologies, possibly due to economic, social, or practical reasons.

OD Intervention

Training tools that teach members of the organization how to solve problems they face or make needed changes to organizational development (OD).

Companywide

Pertaining to or affecting all parts of a company, its employees, or its operations, usually in the context of initiatives, policies, or changes.

Systematic Method

An orderly, planned approach to solving a problem, typically involving steps that are carefully followed.