Question 1
2 / 2 pts
Menu costs of inflation are costs arising from
Menu costs of inflation are costs arising from
the failure to fully index the tax system for inflation.
Correct!
the need for firms to change prices during times of inflation.
attempts by households and firms to avoid paying an inflation tax on money balances.
high nominal interest rates.
Question 2
2 / 2 pts
Expansionary shifts of the aggregate demand curve
Expansionary shifts of the aggregate demand curve
Correct!
can originate in either the assets market or the goods market.
cannot originate in either the assets market or the goods market.
can originate in the goods market, but not the assets market.
can originate in the assets market, but not the goods market.
Question 3
2 / 2 pts
Despite its costs, governments typically resist eliminating inflation because
Despite its costs, governments typically resist eliminating inflation because
the increase in menu costs because of inflation increases the governments tax revenues.
Correct!
doing so would result in lost output and jobs when the economy is near full employment.
governments lack the knowledge of how to eliminate inflation.
as net lenders, governments benefit from inflation.
Question 4
0 / 2 pts
According to new Keynesians, which of the following is NOT an important source of price stickiness?
According to new Keynesians, which of the following is NOT an important source of price stickiness?
Long-term nominal wage contracts
You Answered
Imperfect competition among sellers in the goods market
Long-term nominal price contracts
Correct Answer
Government wage and price controls
Question 5
0 / 2 pts
In the quantity theory of money demand,
In the quantity theory of money demand,
the demand for real balances is determined by the price level.
You Answered
velocity is assumed to vary with the price level.
the price level is assumed to be constant.
Correct Answer
velocity is assumed to be constant.
Question 6
2 / 2 pts
Which of the following best describes a price taker?
Which of the following best describes a price taker?
Firms taking the aggregate price level as given
Prices being set by long-term contracts
Price strategies found in monopolistically competitive markets
Correct!
A firm taking the market price as given
Question 7
2 / 2 pts
Milton Friedman and Anna Schwartz found in their study of money and business cycles from the Civil War to 1960 that
Milton Friedman and Anna Schwartz found in their study of money and business cycles from the Civil War to 1960 that
there is no consistent relationship between money and output over the business cycle.
the growth rate of the money supply rises before output declines in every business cycle.
the growth rate of the money supply falls before output declines during some business cycles and rises before output declines during other business cycles.
Correct!
the growth rate of the money supply falls before output declines in every business cycle.
Question 8
2 / 2 pts
Demand-pull inflation results from
Demand-pull inflation results from
Correct!
policymakers attempts to increase aggregate demand for current output above the full-employment level.
attempts by financial markets to deal with bracket creep.
attempts by the public to receive higher after-tax returns on their savings.
workers pressure for higher wages.
Question 9
0 / 2 pts
Attempts by policymakers to keep the rate of unemployment below the natural rate of unemployment for a sustained period of time will result in
Attempts by policymakers to keep the rate of unemployment below the natural rate of unemployment for a sustained period of time will result in
a recession.
Correct Answer
demand-pull inflation.
a shift of the
LRAS curve to the left.
You Answered
permanently higher levels of output.
Question 10
0 / 2 pts
The Federal Reserve pursued an expansionary monetary policy during 1964 in order to
The Federal Reserve pursued an expansionary monetary policy during 1964 in order to
counteract the effects of a deep cut in federal income taxes.
Correct Answer
keep interest rates from rising.
You Answered
pull the United States out of a deep recession.
bring down the inflation rate.
Question 11
2 / 2 pts
According to the Ricardian equivalence proposition,
According to the Ricardian equivalence proposition,
a decline in the demand for money results in an equivalent increase in the demand for nonmoney assets.
saving equals investment only at full employment.
Correct!
the increase in current income from a tax cut is offset by higher taxes in the future to pay off the debt.
government spending is the equivalent of investment spending.
Question 12
2 / 2 pts
New Keynesian and new classical economists agree that
New Keynesian and new classical economists agree that
production beyond the full-employment level of output is impossible, even in the short run.
the
LRAS curve slopes up.
in the long run the inflation rate must be zero.
Correct!
policymakers cannot permanently maintain the unemployment rate below the natural rate.
Question 13
0 / 2 pts
Long-term inflation is principally
Long-term inflation is principally
You Answered
the result of chronic federal budget deficits.
Correct Answer
a monetary phenomenon.
the result of the slowdown in the growth rate of aggregate supply since 1973.
caused by excess wage demands by unionized workers.
Question 14
2 / 2 pts
Real business cycle analysis differs from both the new classical and the new Keynesian analyses in holding that
Real business cycle analysis differs from both the new classical and the new Keynesian analyses in holding that
changes in aggregate demand can affect output in the long run.
money is neutral in the long run, but not in the short run.
Correct!
the aggregate supply curve is vertical even in the short run.
prices are sticky in the short run.
Question 15
0 / 2 pts
A decrease in the willingness or ability of banks to lend has a significant impact on the economy because
A decrease in the willingness or ability of banks to lend has a significant impact on the economy because
Correct Answer
some borrowers from banks are unable to borrow from nonmoney markets.
You Answered
it causes the short-run aggregate supply curve to shift to the left.
bank profits decline and employment in the banking sector contracts.
it causes the short-run aggregate supply curve to shift to the right.
Question 16
0 / 2 pts
Which of the following central banks continues to emphasize the growth of the money
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admin2021-07-24 17:41:452021-07-25 11:28:45Econ 300 (money and banking) please contact me via message I am not able to chat using I pad. Its 50 question similar to the one below
