EMBRY RIDDLE MGMT673 5.6 MIDTERM EXAM
Question # 00125939
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Updated on: 10/29/2015 04:02 AM Due on: 10/30/2015
1. During the Great Recession, as in previous extended recessions, the U.S. Administration stressed job training programs and enacted repeated extensions of long-term unemployment benefits in response to persistently high levels of unemployment. Discuss the categories of unemployment each program is intended to alleviate and hypothesize on the ineffectiveness of these programs in reducing unemployment.
2. The national debt of many developed nations is projected to grow to unsustainable levels. Why might national legislatures welcome higher inflation? Does inflation offer a means for a country to finance its increasing debt?
3. Explain the money multiplier and why the actual multiplier will be less than the theoretical maximum.
4. Assess the effectiveness of each of the central bank’s monetary tools in controlling the money supply.
5. A nation is enjoying a good economy with high and rising real GDP, expectations for continued growth and profitability, increasing personal incomes and low unemployment (expansionary business cycle). Outline the effects on supply and demand for loanable funds and the likely impact on the real risk-free interest rate.
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Solution: EMBRY RIDDLE MGMT673 5.6 MIDTERM EXAM