eco 320 money banking homework

/in /by

Nursingpapertutors.com stands out as a reputable writing company that delivers high-quality papers specifically designed for nursing students. With its specialization in the nursing field, commitment to quality, customization, and originality, timely delivery, dedicated customer support, and emphasis on confidentiality, Nursingpapertutors.com provides invaluable academic support to nursing students. As a reliable partner in their educational journey, Nursingpapertutors.com helps nursing students excel academically and prepares them to become competent and knowledgeable healthcare professionals.

                                               ECO 320 Money & Banking Homework

                                                            Week 10 Chapter 18

 

Numerical Exercise 11:

Suppose that the Fed’s inflation target is 2 percent, potential output growth is 3.5 percent, and velocity is a function of how much the interest rate differs from 5 percent:

%∆V = 0.5 x (i – 5)

Suppose that a model of the economy suggests that the real interest rate is determined by the equation:

r = 8.5 – %∆Y

where Y is the level of output, so %∆Y is the growth rate of output. Suppose that people expect the Fed to hit its inflation target.

 

A. Calculate the optimal money growth rate needed for the Fed to hit its inflation target in the long run.

 

B. In the short run, if output growth is just 2 percent for two years and the equation determining the real interest rate changes to r = 4.5 – %∆Y, what money growth rate should the Fed aim for to hit its inflation target in that period?

 

C. If the Fed instead maintained the money growth rate from part a, what is likely to happen to inflation?

 

D.  Which policy do you think is better in the long short run?  Which is better in the long run?

 

 

 

 

 

 

 

 

 

Nursingpapertutors.com places a premium on meeting deadlines. The company understands the significance of timely paper submissions for nursing students. To uphold their commitment to punctuality, Nursingpapertutors.com employs a well-organized workflow and efficient team coordination. This ensures that students receive their papers promptly, affording them ample time for review and making any necessary adjustments. Providing exceptional customer support is central to Nursingpapertutors.com’s mission. The company recognizes that nursing students may have queries or require assistance at any time of the day. As such, Nursingpapertutors.com offers 24/7 customer support to promptly address any concerns, clarify instructions, and offer updates on the paper’s progress. Their responsive support team ensures a seamless and positive experience for every student.

 

 
Do you need a similar assignment done for you from scratch? We have qualified writers to help you. We assure you an A+ quality paper that is free from plagiarism. Order now for an Amazing Discount!
Use Discount Code "Newclient" for a 15% Discount!

NB: We do not resell papers. Upon ordering, we do an original paper exclusively for you.