Site MapHelpFeedbackIntermediate
Intermediate
(See related pages)

1

Refer to Figure 9.11 to answer this question. How would people react if the interest rate were 3 percent?
A)They would sell bonds, which would cause bond prices to fall and the interest rate to rise.
B)They would buy bonds, which would cause bond prices to fall and the interest rate to rise.
C)They would sell bonds, which would cause bond prices to rise and the interest rate to rise.
D)They would buy bonds, which would cause bond prices to rise but have an uncertain effect on the interest rate.
2

Refer to Figure 9.11 to answer this question. Suppose that the economy is in equilibrium and each dollar held for transaction purposes is spent, on average, five times per year. What can we infer from this?
A)That nominal GDP is $1000.
B)That real GDP is $1200.
C)That money supply is $1000.
D)That nominal GDP is $400.
E)None of the above can be inferred.
3
In which of the following cases would the quantity of money demanded be the greatest?
A)When nominal GDP is $200 billion and the interest rate is 6 percent
B)When nominal GDP is $100 billion and the interest rate is 6 percent
C)When nominal GDP is $100 billion and the interest rate is 8 percent
D)When nominal GDP is $200 billion and the interest rate is 8 percent
4
What effect will a lower price of bonds have on interest rates?
A)It will raise interest rates.
B)It will lower interest rates.
C)It could either raise or lower interest rates.
D)There is no connection between the price of bonds and interest rates.
5
Advocates of Keynesian monetary policy see all of the following, except one, as goals that monetary policy can help achieve. Which is the exception?
A)Steady interest rates
B)Steady growth in real GDP
C)Stable prices
D)Full employment
6
Which of the following would be appropriate in an economy experiencing an inflationary gap?
A)A tighter monetary policy that decreased money supply
B)An easy monetary policy that increased money supply
C)Lower interest rates
D)A lower exchange rate
7
Which of the following would be appropriate in an economy experiencing a recessionary gap?
A)A tighter monetary policy that decreased money supply
B)An easy monetary policy that increased money supply
C)Higher interest rates
D)A higher exchange rate
8
What is the most serious criticism of anti-inflationary monetary policy?
A)Monetary policy is probably ineffective in fighting inflation.
B)Overemphasis on controlling inflation ignores the equally valid goals of low unemployment and economic growth.
C)Maintaining internal price stability means losing control of the exchange rate.
D)The monetary rules implied by this version of monetary policy are too rigid.





To learn more about the book this website supports, please visit its Information Center.
Copyright (c)2015 McGraw-Hill Education .
Any use is subject to the Terms of Use and Privacy Notice | Report Piracy


Principles of MacroeconomicsOnline Learning Center

Home > Chapter 9 > Intermediate