Exam 15: The Debate Over Monetary and Fiscal Policy

Over the years,economists in universities and government agencies have developed a number of fairly accurate techniques to assist them in predicting what the economy will do.

Which of the following was not a criticism of the unconventional monetary policy used by the Fed in 2009 and 2010?

The main policy tool for manipulating consumer spending is personal income tax,but this tool takes time to have an effect.

According to the quantity theory of money currently used by monetarists,assuming velocity is constant (at a value of 5),a 10 percent increase in the money supply will raise

Contractionary fiscal policy would be most effective in decreasing inflation when

Velocity can be computed with the formula

If the Fed's monetary policy causes a substantial increase in interest rates,what is the most likely impact on velocity?

What is inflation targeting?

If you assume that the equation of exchange is a dependable economic model,then the Fed can control

Since the 1970s,the velocity of money has

When comparing the Keynesian and monetarist approaches,the only substantive difference is that

If the public decides to hold smaller cash balances,this will cause a(n)

Attempts to keep the economy always within a hair's breadth of full employment is called

If economists say that a 7 percent growth in the money supply will increase aggregate demand by 7 percent,they are assuming that velocity

In what year did the housing bubble burst?

Nominal GDP is proportional to money stock when

The Federal Reserve has policy instruments that it can aim directly at a specific category of asset price bubble.

Advocates of activist policy making point to the swift response of the Fed after September 11,2001,as an example of effective policy making.

Monetarism resembles Keynesian thinking in that they both

What are the important factors which determine the velocity of money?