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Question
Analysis of the transmission mechanisms of monetary policy provides four basic lessons for a central bank's conduct of monetary policy. Which of the following is not one of these lessons?
A) Rising interest rates indicate a tightening of monetary policy, whereas falling interest rates indicate an easing of monetary policy.
B) Monetary policy can be highly effective in reviving a weak economy even if short-term interest rates are already near zero.
C) Avoiding unanticipated fluctuations in the price level is an important objective of monetary policy, thus providing a rationale for price stability as the primary long-run goal for monetary policy.
D) Other asset prices beside those on short-term debt instruments do not contain important information about the stance of monetary policy because they are important elements in various monetary policy transmission mechanisms.
Answer
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Related questions
Q:
If aggregated demand is less than actual output, unplanned inventory ________ will cause output to ________.
A) accumulation; rise
B) depletion; fall
C) depletion; rise
D) accumulation; fall
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A) cut; keep from accumulating
B) expand; keep from accumulating
C) cut; build up
D) expand; build up
Q:
In the Keynesian framework, as long as output is above the equilibrium level, unplanned inventory investment will remain ________ and firms will continue to ________ production.
A) negative; lower
B) negative; raise
C) positive; lower
D) positive; raise
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In the Keynesian framework, as long as output is ________ the equilibrium level, unplanned inventory investment will remain ________ and firms will continue to raise production.
A) below; negative
B) above; negative
C) below; positive
D) above; positive
Q:
Keynes mentioned two factors that influenced planned investment spending:
A) interest rates and disposable income.
B) interest rates and business expectations about the future.
C) disposable income and business expectations about the future.
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Everything else held constant, if total consumption increases from $600 to $800 because of an increase of disposable income of $400, then the mpc is equal to
A) 0.2.
B) 0.4.
C) 0.5.
D) 0.6.
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Assume that disposable income equals $1000 and the mpc equals 0.6. If total consumption equal $800, then autonomous consumption is equal to
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Q:
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An autonomous depreciation of the U.S. dollar makes American goods ________ relative to foreign goods and results in a ________ in U.S. net exports, everything else held constant.
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An increase in government spending causes the equilibrium level of aggregate output to ________ at any given interest rate and shifts the ________ curve to the ________, everything else held constant.
A) rise; LM; right
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A) up; left
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A rise in autonomous planned investment spending causes the equilibrium level of aggregate output to ________ and shifts the ________ curve to the ________, everything else held constant.
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A) right; fall
B) right; rise
C) left; fall
D) left; rise
Q:
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A) right; fall
B) right; rise
C) left; fall
D) left; rise
Q:
When the interest rate rises,
A) planned investment falls.
B) planned investment rises.
C) planned investment will be unaffected.
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Q:
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A) poorly; erratically
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B) severely overpredict the demand for money.
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Q:
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Q:
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B) the severe recession in 1981-82.
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Q:
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Q:
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All of the following are common to banking crises in different countries except
A) financial liberalization or innovation.
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Q:
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B) home mortgages.
C) education loans.
D) vacation loans.
Q:
During times of financial crisis, mark-to-market accounting
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B) leads to an increase in the financial firms' balance sheets since they can now get assets at bargain prices.
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D) results in financial firms' assets increasing in value.
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A) screening; restrictive covenants
B) screening; branching restrictions
C) identifying; branching restrictions
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