Monetarists are economists who believe that the Federal Reserve is likely to make lots of mistakes in the implementation of monetary policy. Therefore, they tend to believe: Select one: O A. in monetary policy discretion. O B. in monetary policy run by elected officials. O C. in monetary policy rules. O D. that the Federal Reserve should be abolished. The increased fear and uncertainty caused by a new and potentially more deadly strain of the coronavirus is likely to cause the AD curve to: Select one: O A. shift inward. O B. shift outward. OC. become steeper. O D. not shift.

Monetarists are economists who believe that the Federal Reserve is likely to make lots of mistakes in the implementation of monetary policy. Therefore, they tend to believe: Select one: O A. in monetary policy discretion. O B. in monetary policy run by elected officials. O C. in monetary policy rules. O D. that the Federal Reserve should be abolished. The increased fear and uncertainty caused by a new and potentially more deadly strain of the coronavirus is likely to cause the AD curve to: Select one: O A. shift inward. O B. shift outward. OC. become steeper. O D. not shift.

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter15: The Debate Over Monetary And Fiscal Policy

Section: Chapter Questions

Problem 4TY

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Similar questions

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 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. Oc. In the monetarist transmission mechanism, there is a need for the money market to affect the loanable funds market or investment before aggregate demand will be affected. Od. In the monetarist transmission mechanism, changes in the money market indirectly affect aggregate demand.
Economics To increase the money supply, what could the Federal Reserve do? Choose one or more: OA. make an open market sale OB. decrease the discount rate O Cincrease income taxes OD. increase the discount rate O E. make an open market purchase
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
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.
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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
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.
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
The economy starts at the steady state. Whích of the following changes will increase short-run output on impact? Select one: O a. An increase in the parameter governing how aggressively monetary policy responds to inflation. O b. A decrease in the target rate of inflation. O c. A decrease in the parameter governing how aggressively monetary policy responds to inflation. O d. An increase in the target rate of inflation.
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Consider a central bank that chooses to implement its monetary policy by expanding the money supply by a fixed percentage amount in every year. One important disadvantage with this approach to monetary policy is that it may.. Oa. Create a recessionary output gap. O b. Be destabilising if the demand for money is unstable. O c. Be inconsistent with the Bank of Canada Act. O d. Lead to sustained inflation. O e. Lead to stable growth of national income.