Question

a) Monetarists
b) Keynesians
c) Classical economists
d) Fisherites

Answer 1

Ans: b) Keynesians

Answer 2

Ans: d) is the misconception that one is wealthier; it occurs when the money supply grows.

Answer 3

Ans: c) states that an increase in the money supply leads to lower interest rates, which stimulates investment and aggregate demand.

Answer 4

Ans: c) The price level will increase by 12%.

Answer 5

Ans: c) It stays the same.

Answer 6

Ans: b) $20 trillion

Answer 7

Ans: a) shifts the aggregate demand curve to the left.

Answer 8

Ans: c) expansionary monetary policy.

Answer 9

Ans: d) decreases; decreases

Answer 10

Ans: c) decrease consumption and investment spending.

Answer 11

Answer: a) decreases; increases

Answer 12

Ans: d) increase consumption and investment spending.

Answer 13

Ans: c) Low unemployment and stable prices.

Answer 14

Ans: a) Easy money

Answer 15

Ans: c) too much monetary policy can have inflationary effects.

Answer 16

Ans: b) the federal funds rate will fall.

Answer 17

Ans: b) rise; fall

Answer 18

Ans: b) They will increase.

Answer 19

Ans: a) Reserve requirements

Answer 20

Ans: d) Open market operations

Answer 21

Ans: a) To establish more effective supervision of the banking system in the United States.

Answer 22

Ans: d) To keep interest rates low.

Answer 23

Ans: c) The Federal Reserve is considered to be an independent central bank.

Answer 24

Ans: a) To clear checks.

Answer 25

Ans: d) The Federal Reserve System is subject to Congressional oversight.

Answer 26

Ans: b) 12