Which of the following would be classed as an expansionary monetary policy? O A. A decrease in the quantity of money. O B. A decrease in interest rates. С. An increase in government taxation. O D. An increase in government expenditure. ОЕ. An increase in VAT.
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- Which of the following would be classed as an expansionary monetary policy? Ο Α. A decrease in the quantity of money. ОВ. A decrease in interest rates. C. An increase in government taxation. O D. An increase in government expenditure. O E. An increase in VAT.Peter thinks that low interest rates hurt the economy. Mary disagrees and says that low interest rates help the economy. All othe things being equal, who is right? O a. None of the alternatives is correct. b. Mary, because low interest rates encourage investment. O c. Mary, because she refers to the monetary flow of the economy, which dominates the real flow. O d. Peter, because low interest rates make people hoard and store money. O e. Peter, because he refers to the real flow of the economy, which determines the monetary flow. Clear my choiceMonetary policy becomes more effective as Select one: O a. the income tax increases O b. the interest sensitivity of investment increases O c. the marginal propensity to save increases O d. the interest sensitivity of money demand increases
- Which of the following are examples of monetary policy that decrease aggregate demand? O A. a decrease in the quantity of money and an increase in interest rates O B. a decrease in taxes and a decrease in interest rates O C. an increase in transfer payments and an increase in interest rates O D. an increase in the quantity of money and a decrease in interest rates 身9. What is the difference between monetary policy and fiscal policy? * is known as A-The tool used by the central bank to regulate the money supply in the monetary policy B-The tool used by the government in which it uses its tax revenues and expenditure policies to affect the economy is known as fiscal policy C-Monetary poliey is administered by the government of the country whereas fiscal policy is administered by the eentral bank of the country economy O A and B A only B only A and C TOSHIBAIn regard to monetary policies, nonactivists have various proposals. True or False: Some nonactivists believe in the Taylor rule, which suggests that the annual money-supply growth rate should be based on the growth rates of velocity and Real GDP to ensure that the price level does not fluctuate. O False O True Which of the following statements best explains the difference between the Taylor rule and the two other nonactivist rules (the constant-money growth rate rule and the predetermined-money growth rate rule)? O The Taylor rule does not take into account the stability of prices. O The Taylor rule suggests how much the money supply should grow. O The Taylor rule does not take into account the current state of the economy. O The Taylor rule is not a derivation of the equation of exchange.
- QUESTION 5 Which of the following statements is correct? O A. monetary policy was contractionary during the Great Recession and contractionary during the COVID Recession O B. monetary policy was expansionary during the Great Recession and expansionary during the COVID Recession O C. monetary policy was contractionary during the Great Recession and expansionary during the COVID Recession O D. monetary policy was expansionary during the Great Recession and contractionary during the COVID RecessionThe diagrams show the monetary equilibrium and the demand for investment. The economy begins with money supply Ms, money demand Mp, and investment demand ID. The interest rate is in and desired investment is lo. Interest Rate % O A. interest rates will fall and the quantity of desired investment expenditure will fall. O B. interest rates will rise and the quantity of desired investr expenditure will fall. C. interest rates will rise and the quantity of desired investment expenditure will rise. O D. interest rates will fall and the quantity of desired investment expenditure will rise. 00 .O Ms a. Beginning at the initial equilibrium, suppose the Bank of Canada increases the money supply. In this case, Quantity of Money Mp Interest Rate % Desired Investment QAll of the following shift the demand for money curve EXCEPT O a. an improvement in financial technology. O b. a rise in the nominal interest rate. a decrease in real GDP. O d. an increase in the price level. O e. an increase in real GDP.
- If desired investment spending is relatively sensitive to changes in interest rates, then monetary policy could be very useful because it would be in reducing expenditure during infationary periods and in expanding expenditure during recessionary periods. O a. Very ineffective; very ineffective. O b. Very Inetfective; very effective. O a. Very effective; ineffective. O d. Very effective; very effective. O e. Somewhat effective; very ineffective.Assume, in the 3rd quarter of 2018 in the U.S., the velocity of money was 3.08 and the M2 money supply was $1,050 million. The average prices in the economy was $1.44. Based on this, what was the real GDP of the U.S. in the 3rd quarter of 2018. O a. $2,750 million O b.$1,250 millon Oc. $2,000 million O d. 52.250 millionWhich point/s represent an equilibrium in the goods market? a. A only O b. A and D O c. A and C O d. All of the above Which point/s represent an equilibrium in the money market? O a. A and D O b. All of the above O c. A only O d. A and C A decrease in autonomous spending will decrease the equilibrium interest rate. O a. False; keep O b. False; increase O c. False; not affect because autonomous spending is not related to interest rate O d. True