Which of the following examples shows a coordination problem with monetary policy?
a. Five months after the Fed decreases the money supply, consumer confidence in investing plummets.
b. When the Fed decreases the money supply, the government increases purchases.
c. After the Fed increases the money supply, pension funds decrease their interest rates.
d. After the Fed increases the money supply, the government realizes the MPC estimate was too high.
b. When the Fed decreases the money supply, the government increases purchases.
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Which of the following changes should make activist policy makers more confident in their capacity to make good policy recommendations?
A) structural change in the economy B) changes in multipliers C) a longer estimated lag for monetary policy D) none of the above
Agricultural staples of the colonial South included:
a. rice. b. tobacco. c. indigo. d. All of the above.
Which of the following will tend to increase velocity?
a. a decrease in the number of payments b. a decrease in inflation c. an increase in interest rates d. an increase in the money supply e. All of the above.
The crowding-in effect depends on the sensitivity of investment to
a. GDP, as does the crowding-out effect. b. interest rates, whereas the crowding-out effect depends on the sensitivity of investment to GDP. c. interest rates, as does the crowding-out effect. d. GDP, whereas the crowding-out effect depends on the sensitivity of investment to interest rates.