Exam 14: Modern Macroeconomics and Monetary Policy

The coefficient that represents the average number of times a dollar is used to buy goods and services is called

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?

Alan Greenspan and Ben Bernanke, former chairmen of the Fed's Board of Governors, believe that the low interest rates of 2003-2014 were primarily the result of

When the Fed unexpectedly decreases the money supply,

In the long run, changes in the money supply affect only the price level because

Cross-country figures indicate that

Since the mid-1980s, the primary indicator of monetary policy has been

Which of the following is inconsistent with the view that Fed monetary policy was excessively expansionary during 2010-2013?

A shift to a more expansionary monetary policy will

When the Fed sells bonds and drains reserves from the banking system, thereby reducing the supply of money, this policy will

In an economy in which real output grows at an average rate of 3 percent per year, a 7 percent average rate of growth in the money supply would result in

Demographic changes that increase the number of people in the lending phase (for example, age 50 to 75) and reduce the number in the borrowing phase (under age 50), will

If the Federal Reserve unexpectedly decides to sell bonds, which of the following will most likely happen in the short run?

When continued for several years, rapid growth in the money supply relative to the growth of real output will likely lead to an extended period of

Shifts in monetary policy will

Figure 14-3 Suppose the economy was currently operating at SRAS and AD₂ in Figure 14-3. To combat inflation, the Fed institutes restrictive monetary policy. Suppose that by the time the policy impacts the economy, AD has already moved to AD₁. Which of the following would be true?

In the short run, which of the following is the most likely effect of an unanticipated move to a more expansionary monetary policy?

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

Large or persistent inflation is almost always caused by

During the second half of 2008 the monetary base was growing far more rapidly than the money supply because