Home » 1- According to traditional Keynesians, monetary policy is ineffective in affecting the economy during a recession because A-an increase in the money…

1- According to traditional Keynesians, monetary policy is ineffective in affecting the economy during a recession because A-an increase in the money…

1- According to traditional Keynesians, monetary policy is ineffective in affecting the economy during a recession because

A-an increase in the money supply will have little impact on interest rates.

B-an increase in the money supply will only lead to higher interest rates.

C-an increase in the money supply will only lead to lower investment spending.

D-an increase in the money supply will raise the amount of government debt.

2- Suppose the actual federal funds rate is below the rate implied by a particular inflation goal. In this situation, the Taylor rule implies that

A-monetary policy is expansionary.

B-monetary policy is contractionary.

C-monetary policy is neither expansionary or contractionary.

D-fiscal policy is contractionary.

3- According to Keynes, the impact of an increase in the money supply is

A-a lower interest rate and a larger growth in real GDP.

B-a lower interest rate and a smaller growth in real GDP.

C-a higher interest rate and a larger growth in real GDP.

D-a higher interest rate and a smaller growth in real GDP.

4- A tariff is a

A-legal limit on sales of a foreign product in the domestic market.

B-regulation of the quality of a foreign product sold in the domestic market.

C-tax on sales of a foreign product in the domestic market.

D-voluntary limit on sales of a foreign product in the domestic market.

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