For Each of the Following Policies Indicate Whether the Policy

question 67

Essay

For each of the following policies indicate whether the policy is i. a monetary or a fiscal policy, ii an active or a passive policy, and iii a policy by rules or with discretion: a. the central bank follows a policy of all owing the money supply to grow at a constant 4 percent per year;
b. a government follows a policy of keeping government spending over a calendar year equal to government revenue over the cal endar year;
c. the central bank uses judgment to adjust the growth of the money supply based on expectations of what will happen to output and inflation over the next five years.
d. the government keeps tax laws unchanging and allows government spending to change, depending on which spending bills are passed by the legi sl ature.
e. the central bank follows a policy of adjusting the money supply according to a formula based on deviations of unemployment from the natural rate of unemployment.

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Definitions:

Financial Calculator

A specialized calculator used for complex financial calculations, including interest rates, loan payments, and investment values.

Expressed

Clearly stated, demonstrated, or articulated in a particular manner.

Years

Years are units of time used to measure duration, consisting of 12 months or 365 days in a common year and 366 in a leap year.

Ordinary Annuity

A series of equal payments made at equal intervals of time, commonly used in calculations of loan repayments or future savings, where interest compounding occurs at the end of each period.