Which of the following is a belief of the monetarists?
A. They think the Great Depression was made worse by poor conduct of monetary policy.
B. They believe monetary policy is transmitted to the economy only through its effect on interest rates and planned investment.
C. They believe that the interest-investment curve is horizontal.
D. They believe the crowding-out effect is insignificant.
Answer: A
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A factor determining the supply of U.S. dollars in the foreign exchange market is the
A) expected future exchange rate. B) expected future interest rate in the United States. C) U.S. supply of exports. D) expected future interest rate in foreign countries.
The increase of the real money supply by 10% by the Federal Reserve when the unemployment rate rises by 1% is an example of
A) the conduct of procyclical monetary policy. B) the utilization of feedback policy rule. C) the utilization of rigid policy rule. D) the conduct of nondiscretionary fiscal policy.
Suppose that a more efficient way to produce a good is discovered, thus lowering production costs for the good. This will cause: a. an increase in supply, or a rightward shift of the supply curve
b. a decrease in supply, or a leftward shift of the supply curve. c. an increase in quantity supplied, or a movement down the supply curve. d. a decrease in quantity supplied, or a movement up the supply curve.
Which of the following is true? a. Sometimes the Fed moves to partly offset or even neutralize the intended effects of fiscal policy changes
b. If a consensus was reached between fiscal and monetary policy makers, you would not expect contractionary fiscal policy and expansionary monetary policy to be adopted at the same time. c. If policymakers' timing is off, expansionary monetary policy could cause an inflation problem rather than reducing a high unemployment problem. d. All of the above are true