Exam 14: Modern Macroeconomics and Monetary Policy

According to the Austrian view of the business cycle, if expansionary monetary policy pushes the interest rate to an artificially low level, the result will be

Use the figure below to answer the following question(s). Figure 14-1 -In Figure 14-1, an unanticipated shift to a more expansionary monetary policy will shift

The "quantitative easing" policies of the Fed during, and following, the financial crisis of 2008-2009,

Which of the following would be most indicative of a shift to a more restrictive monetary policy?

In the long run, the primary effect of rapid monetary growth is

The velocity of money is

During 2001-2004, the Fed injected additional reserves into the banking system, which reduced the federal funds rate and other short-term interest rates. Other things constant, what is the most likely short-run impact of this policy?

Expansionary monetary policy will

"Every major contraction in the U.S. economy has either been created or greatly exacerbated by monetary instability. Every major inflation has been caused by monetary expansion." Which of the following economists made this statement?

In an economy in which velocity is constant and real output grows at an average rate of 3 percent per year, a 5 percent average rate of growth in the money supply would result in a

Beginning from full-employment equilibrium, illustrate graphically how each of the following would impact the economy. a.the short-run impact of an unanticipated decrease in the money supply b.the long-run impact of an unanticipated decrease in the money supply

If the Federal Reserve wanted to expand the money supply in order to increase output, it should

Figure 14-6 -In the situation shown in Figure 14-6, how could the Fed return the economy to potential output?

Which of the following reduced the demand stimulus effects of the Fed's low interest rate policy pursued during, and after, the financial crisis of 2008-2009?

When the Fed unexpectedly decreases the money supply,

An unanticipated shift to a more expansionary monetary policy by the Fed will

Why do individuals choose to hold part of their wealth in money rather than in other types of assets? Discuss the benefits and costs of holding money.

The cost of holding money balances increases when

Since 1980, changes in the nature of both the M1 and M2 money supply have

In the aggregate demand-aggregate supply model, the short-run effects of an unanticipated decrease in the money supply will be