If the fed wants to raise real gdp growth by raising money supply growth, which condition will make monetary policy more effective in raising real gdp growth?

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09-09-2022
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If the fed wants to raise real gdp growth by raising money supply growth, which condition will make monetary policy more effective in raising real gdp growth?

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rafikiedu08 rafikiedu08 · Answer 1 · 2022-09-13T18:46:14+02:00

The fed wants to raise real GDP growth by raising money supply growth, condition will make monetary policy more effective in raising real GDP growth is Prices continue to remain vert sticky.

When prices are sticky increase in aggregate demand is larger and monetary policy is more effective.

What is GDP?

A monetary indicator of the market worth of all the finished goods and services produced in a nation over a given time period is called the gross domestic product (GDP). This measurement is frequently changed before it can be trusted as an indicator because of how complicated and subjective it is.
To compare living standards between countries, using a basis of GDP per capita at purchasing power parity (PPP) may be more useful, whereas nominal GDP is more useful for comparing national economies on the global market. GDP (nominal) per capita does not, however, reflect differences in the cost of living and the inflation rates of the countries.
The contribution of each industry or sector to the overall GDP can also be quantified. The per capita GDP of a region is calculated as the GDP divided by the total population (also called the Mean Standard of Living).
Numerous national and international economic groups maintain GDP definitions. GDP is described as "an aggregate measure of production equal to the sum of the gross values added of all resident and institutional units engaged in production and services (plus any taxes, and minus any subsidies on products not included in the value of their outputs)" by the Organization for Economic Co-operation and Development (OECD).

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