Exam 26: Transmission Mechanisms of Monetary Policy

An expansionary monetary policy increases net exports by ________ interest rates and ________ the value of the dollar.

The monetarists complained that early Keynesian structural models tended to ignore the impact of monetary policy changes on ________.

During the Great Depression, real interest rates ________.

Movements of real interest rates indicate that, contrary to the early Keynesians' beliefs, ________ policy was ________ during the Great Depression.

If the aggregate price level adjusts slowly over time, then an expansionary monetary policy lowers ________.

A contractionary monetary policy decreases net exports by ________ interest rates and ________ the value of the dollar.

The subprime financial crisis caused a recession because of the ________ in adverse selection and moral hazard problems and the ________ in housing prices.

The monetarist reduced-form evidence does not specify the working of the economy and thus is considered to be a ________.