lesson 12

Question 1 (6725424):Critics of the Monetarist theory, such as Keynesians, argue that both V and Q are _____________.

Type:Multiple Choice

Points awarded:1.00 / 1.00

Your Answer(s):unstable

Correct answer(s):unstablestablenot erracticnone of the above

Question 2 (6725429):_____________ argue that requiring the Fed to operate with a monetary rule for money growth at the same rate as increases in realGDPwould be very wise.



Your Answer(s):Monetarists

Correct answer(s):MonetaristsKeynesiansAll the aboveNone of the above

Question 3 (6725395):As more loans are made based on _________ reserve requirement, the money supply expands by a multiple .



Your Answer(s):a lower

Correct answer(s):a higheran unchangeda lowernone of the above

Question 4 (6725404):The level and growth of the NDP is directly impacted by the amount of Business Investment which, in turn, is directly impacted by _______________ (the cost of renting money).



Your Answer(s):the interest rate

Correct answer(s):the interest ratethe weatherglobal warmingthe success of whale reproduction

Question 5 (6725421):The ___________ school of economics uses the quantity theory of money (equation of exchange) as the basis of its approach.



Your Answer(s):Monetarist

Correct answer(s):LondonMonetaristKeynesianAll the above

Question 6 (6725413):A net outflow of dollars resulting from a trade deficit is often returned to theUnited Statesfor purchase of Treasury bonds that pay a market interest rate with __________ risk.



Your Answer(s):low

Correct answer(s):highmoderatelownone of the above

Question 7 (6725408):One problem in the implementation of monetary policy is the lack of control over the __________(the number of times a dollar is spent).



Your Answer(s):multiplier

Correct answer(s):accelerationmultipliervelocitynone of the above

Question 8 (6725391):Funds transferred from the Fed to pay for securties purchased from a bank (or the public) are then held by the bank who can then extend more loans and this increases the money supply by amultipleof the original amount.

Type:True or False


Your Answer(s):True

Correct answer(s):TrueFalse

Question 9 (6725388):In a recession the money supply can be _____________ by the Fed buying securities.



Your Answer(s):increased

Correct answer(s):kept from growingdecreasedincreasedall the above

Question 10 (6725427):_______________ argue that fiscal policy is weak due to the crowding-out effect.



Your Answer(s):Monetarists

Correct answer(s):MonetaristsKeynesiansAll the aboveNone of the above

Question 11 (6725386):The _________________ is the buying and selling of Treasury securities to influence the nations money supply.



Your Answer(s):federal open market operations

Correct answer(s):setting of the reserve requirementsetting of the discount ratefederal open market operationsnone of the above

Question 12 (6725419):Thequantity theory of moneyis based upon the equation of exchange and assumes that V and Q are both ________ over time.



Your Answer(s):stable

Correct answer(s):unstablestableerraticnone of the above

Question 13 (6725380):The Fed regulates the money supply using __________ basic tools of operation.



Your Answer(s):three

Correct answer(s):onetwothreefour

Question 14 (6725407):One reason that monetary policy is believed to be very effectivebyit supportersis because it does not impact all citizens in an equal manner.

Type:True or False


Your Answer(s):True

Correct answer(s):TrueFalse

Question 15 (6725400):The effectiveness of changes in the Discount Rate depends on commercial banks changing their ___________ practices to impact the money supply.



Your Answer(s):bond buying

Correct answer(s):lendingbond buyingadvertisingaccounting

Question 16 (6725416):In the equation of exchange, M x V =P x Q, the V represents ___________________



Your Answer(s):the average price level

Correct answer(s):the average amount of money in circulationthe average frequency with which a dollar is spentthe average price levelquantity purchased

Question 17 (6725385):The reserve requirement varies according to the ______________________ and the type of deposit (checking, savings, etc.)



Your Answer(s):size of the financial institution

Correct answer(s):amount of caffeine in the bloodstreamsize of the financial institutionmood of the Fed each Monday morningnone of the above

Question 18 (6725415):A tight money policy (high interest rates) will _________ the value of the dollar, reduce exports, slow the American economy, but will attract a return of American dollars spent for imports.



Your Answer(s):increase

Correct answer(s):increasemaintaindecreasenone of the above

Question 19 (6725397):The basic concepts for the Fed to implement an easy money policy would include



Your Answer(s):All the above

Correct answer(s):Federal Reserve buys securitiesReserve ratio is reducedDiscount rate is reducedAll the above

Question 20 (6725432):The ______________ school is most widely held today, but is continuing to change with the global economy.



Your Answer(s):Keynesian

Correct answer(s):MonetaristKeynesianUtopian SocialistNone of the above

Documents

lesson 12