Which of the following statements is true? Oa. In the monetarist transmission mechanism, if individuals are faced with an excess supply of money, they spend that money on a wide variety of goods-not just bonds or other assets, as is the case in the Keynesian transmission mechanism. O b. In the monetarist transmission mechanism, the aggregate supply curve is downward sloping. In the monetarist transmission mechanism, there is a need for the money market to affect the loanable funds market or investment befo aggregate demand will be affected. Od. In the monetarist transmission mechanism, changes in the money market indirectly affect aggregate demand.

Which of the following statements is true? Oa. In the monetarist transmission mechanism, if individuals are faced with an excess supply of money, they spend that money on a wide variety of goods-not just bonds or other assets, as is the case in the Keynesian transmission mechanism. O b. In the monetarist transmission mechanism, the aggregate supply curve is downward sloping. In the monetarist transmission mechanism, there is a need for the money market to affect the loanable funds market or investment befo aggregate demand will be affected. Od. In the monetarist transmission mechanism, changes in the money market indirectly affect aggregate demand.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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In the above figure, suppose that the economy has moved from point Dto point B.According to the monetarist theory of the business cycle, what could have caused this movement? Select one: O a.a decrease in the money wage rate b. an increase in the money wage rate c. an increase in the growth rate of the quantity of money O d. an increase in uncertainty about future sales and profits
Which statement is true? O Austrians believe that financial markets are always efficient and that no central bank intervention will cause a distortion (S=1). O Monetarists, Real Business Cycle Theorists, and Austrian Business Cycle Theorists all believe that business cycles are a result.of bad monetary policy. O Monetarists believe that financial markets are efficient (S=1), whereas Keynesians belie financial markets are prone to failure (S 1). O Monetarists believe that financial markets are prone to failure (S#l), whereas Keynesians believe fınancial markets are efficient (S=1).
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
Using the simple monetary rule Rt-r=m(T-), if m=0.5 and the inflation rate is 2 percent below the target inflation rate, the Federal Reserve will A. raise the marginal product of capital by 1 percent. B. lower the interest rate by 1 percent. O C. raise the interest rate by 1 percent. OD. lower the marginal product of capital by 1 percent. O E. lower the target rate by 2 percent.
In regard to monetary policies, nonactivists have various proposals. True or False: Some nonactivists believe in a predetermined-money growth rate, which suggests that the monetary authorities should target the proper federal funds rate before implementing monetary policies. O True O False 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 is not a derivation of the equation of exchange. 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.
According to the monetary transmission process, what will be the effect of a decrease in the money supply? O a. A decrease in the interest rate, an increase in investment spending, and an increase in GDP. O b. An increase in the interest rate, an increase in investment spending, and an increase in GDP. O c. A decrease in the interest rate, a decrease in investment spending, and a decrease in GDP. O d. An increase in the interest rate, a decrease in investment spending, and a decrease in GDP. O e. An increase in the interest rate, an increase in investment spending, and a decrease in GDP.
Monetary 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
All 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.
What type of macroeconomics presents the view that the market economy works well, that aggregate fluctuations are a natural consequence of an expanding economy, and that government intervention cannot improve the efficiency of the market economy? macroeconomics is the view that the market economy works well, that aggregate fluctuations are a natural consequence of an expanding economy, and that government intervention cannot improve the efficiency of the market economy. O A. Monetarist B. Classical OC. Keynesian O D. Long-run Classical macroeconomics A. is currently championed by Paul Krugman in his weekly column in the New York Times B. had its beginnings with the 1936 publication The General Theory of Employment, Interest, and Money C. explains how the economy performs in the face of a major slump in spending D. fell into disrepute during the Great Depression Click to select your answer. MacBook Air DII DD 000 F11 F12 F7 F8 F9 F10 esc F4 F5 F6 F1 F2 F3 & ! @ # $ 5 7 8 delete 1 2 3 {…
In 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.
Which of the following represents a short-run e_ect of a monetary contraction? Select one: O a. an increase in the interest rate O b. a reduction in the price level O c. all of the above O d. a reduction in output
If economists say that monetary policies cannot affect GDP in the long run, what do they mean? O a. Monetary policy will change potential output and inflation by equal amounts O b. Only fiscal policies can affect potential output O C. Workers and firms have money illusion O d. Workers and firms have no money illusion