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Question
The economist Irving Fisher, after whom the Fisher effect is named, explained why interest rates ________ as the expected rate of inflation ________, everything else held constant.A. rise; increases
B. rise; stabilizes
C. fall; stabilizes
D. fall; increases
Answer
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Related questions
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The organization responsible for the conduct of monetary policy in the United States is the
A. Comptroller of the Currency.
B. U.S. Treasury.
C. Federal Reserve System.
D. Bureau of Monetary Affairs.
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A. balanced budgets.
B. rapidly growing money supplies.
C. falling money supplies.
D. constant money supplies.
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A. exchanges.
B. banks.
C. over-the-counter markets.
D. finance companies.
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A. are no longer important players in financial intermediation.
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D. produce nothing of value and are therefore a drain on society's resources.
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Which of the followings does NOT describe the goods market in the ISLM model?
A. consumption function
B. investment function
C. government spending and tax
D. money demand function
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Q:
An autonomous increase in money demand, other things equal, shifts the ________ curve to the ________.
A. IS; right
B. IS; left
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Q:
In the long-run ISLM model and with everything else held constant, as long as the level of output ________ the natural rate level, the price level will continue to ________, shifting the LM curve to the ________, until finally output is back at the natural rate level.
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Q:
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A. demand; right
B. demand; left
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Q:
A policy in which the money supply is kept growing at a constant rate regardless of the state of the economy is
A. a Taylor rule.
B. a discretionary policy.
C. a policy rule advocated by monetarists.
D. advocated by activists.
Q:
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A. the monetarist revolution.
B. the Lucas critique.
C. public choice theory.
D. new Keynesian theory.
Q:
The Lucas critique indicates that
A. advocates of discretionary policies' criticisms of rational expectations models are well-founded.
B. advocates of discretionary policies' criticisms of rational expectations models are not well-founded.
C. expectations are important in determining the outcome of a discretionary policy.
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Q:
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A. is horizontal.
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Q:
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Q:
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A) created a currency board.
B) undergone dollarization.
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Q:
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A) IMF
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Q:
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When the economy suffers a permanent negative supply shock and the central bank does not respond by changing the autonomous component of monetary policy, then
A. inflation will be lower.
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C. output will be lower.
D. inflation will not change.
E. both B and C.
Q:
If the economy suffers a permanent negative supply shock because there is an increase in regulations that permanently reduce the level of potential output, then
A. potential output falls.
B. the long-run aggregate supply curve shifts leftward.
C. the short-run aggregate supply curve shifts upward.
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Q:
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Q:
With the policy rate set at zero, the rise in expected inflation will lead to a ________ in the real interest
rate, which will cause investment spending and aggregate output to ________.
A. fall; rise
B. fall; fall
C. rise; rise
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Q:
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A. The worldwide decline in demand led to a collapse of Chinese exports.
B. Instead of relying solely on the economy's self-correcting mechanism, much more aggressive fiscal expansions than those of the U.S. (in addition to a substantial monetary easing) served to shift the AD curve back to general equilibrium relatively quickly.
C. The Chinese economy was better able than the U.S. economy to weather the financial crisis with output growth starting to grow earlier and more quickly than that of the U.S.
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E. None of the above.
Q:
Explain and demonstrate graphically the effects of a negative supply shock in both the short-run and long-run.
Q:
The Baumol-Tobin analysis suggests that an increase in the brokerage fee for buying and selling bonds will cause the demand for money to ________ and the demand for bonds to ________.
A. increase; increase
B. increase; decrease
C. decrease; increase
D. decrease; decrease
Q:
________ in the foreign interest rate causes the demand for domestic assets to shift to the right and the domestic currency to ________, everything else held constant.
A. An increase; appreciate
B. An increase; depreciate
C. A decrease; appreciate
D. A decrease; depreciate
Q:
A decrease in the foreign interest rate causes the demand for domestic assets to shift to the ________ and the domestic currency to ________, everything else held constant.
A. right; appreciate
B. right; depreciate
C. left; appreciate
D. left; depreciate