question archive If the FOMC decides on the above policy, what is the level? Please specify the region of the AS curve the economy is presently in
If the FOMC decides on the above policy, what is the level? Please specify the region of the AS curve the economy is presently in
Subject:EconomicsPrice:2.88 Bought3
If the FOMC decides on the above policy, what is the level? Please specify the region of the AS curve the economy is presently in.
What effect would the FOMC policy have on the Dollar/Pound exchange rate? Assume that the policy affects the demand for Pounds. What would be the effect on the U.S. current balance?
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The FOMC policy would affect the Dollar/Pound exchange rate because the short-run changes cannot be approved due to the limitation of resources. Assuming that the policy changes the demand for Pounds, it will increase the real GDP.
The effect on the U.S. current balance is that the Federal Open Market Committee (FOMC) would take the expansionary monitory policy. For example, it would undertake new projects through the increasing of money supply in the economy. At the same time, FOMC has to think about higher growth and lower employment rate. Therefore, a higher amount of loan can be borrowed at a lower interest rate. Thus, it should be reduced for higher investments and consumption.
