Exam 24: Monetary Policy Theory

If inflation was 1% and the monetary authorities set the nominal interest set at the zero lower bound, the real interest rate would be ________.

Activists of the policies believe that ________.

What are the objectives of quantitative easing?

When nominal interest rates are zero, the MP curve has a ________ slope because monetary authorities ________ lower the nominal interest rate and the real interest rate ________ as inflation rates decline.

Explain and show graphically why continuous monetary growth is needed to generate inflation. Describe how the inflation process is generated.

What three forms does non-conventional monetary policy take?

According to the new classical school of thought, a continually increasing money supply causes ________.

Nonactivists of policies contend that a policy of shifting the aggregate ________ curve will be costly because it produces ________ volatility in both the price level and output.

Figure 27-3 -In the new classical model in Figure 27-3, an anticipated expansionary monetary policy ________.

Steve the economist tells his students that one anticipated policy is just like any other-none has any effect on aggregate output. You can probably infer that he is a ________.

Theoretically, one can distinguish a demand-pull inflation from a cost-push inflation by comparing ________.