The rate targeted by the Federal Reserve System as it conducts monetary policy is the ________. A) discount rate B) prime rate C) Treasury bill rate D) fed funds rate ANSWER D
Date: September 10th, 2020
The short-run refers to a period a. of a few days. b. when prices and wages cannot fully adjust. c. of a few years. d. during which trend cannot change. e. of analysis used in the classical model ANSWER B
Date: September 10th, 2020
According to a study by Thomas Cooley and Gary Hansen, the cost in lost consumption of a 10% per annum rate of inflation is A) negative. B) approximately 0.001%. C) approximately 0.5%. D) approximately 5.0%. ANSWER C
Date: September 10th, 2020
Given the accelerationist Phillips curve Δπ = – 0.3 (U – 6 ) + ρ, suppose that inflation in the preceding period was 3 percent, unemployment is 6 percent, and there is a price shock of 2 percent. The current inflation rate is ________. A) 3 percent B) 0.2 percent C) 5 percent D) 1 […]
Date: September 10th, 2020
The quantity theory of money tells us that real money balances are proportional to income, since ________. A) velocity is assumed constant in the short run B) the supply and demand of money are equal in equilibrium C) changes in the quantity of money lead to proportional changes in the price level D) all of […]
Date: September 10th, 2020
Collateral is used in all of the following credit arrangements, except A) repurchase agreements. B) automobile loans. C) credit card lending. D) mortgage lending. ANSWER C
Date: September 10th, 2020
In a one-period economy A) consumption equals disposable income. B) consumption equals disposable income plus the value of non-market work. C) savings is always positive. D) consumers may increase their consumption by borrowing. ANSWER A
Date: September 10th, 2020
From the equation of exchange, if both nominal income and the quantity of money (M) have tripled, while the price level (P) has increased by 50 percent and velocity (V) remains constant, then real output (Y) ________. A) also triples B) increases by 50 percent C) doubles D) decreases by 50 percent E) none of […]
Date: September 10th, 2020
The most likely cause of a hyperinflation is A) central bank incompetence. B) the inability to finance government spending through taxation or borrowing. C) an acute shortage of natural resources. D) over-aggressive labor unions. ANSWER B
Date: September 10th, 2020
The Friedman Rule is optimal because A) households would be able to buy more as prices decrease. B) the central bank has better control of the money supply. C) money is neutral. D) households are indifferent between holding bonds and money. ANSWER D
Date: September 10th, 2020
