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Movements of real interest rates indicate that, contrary to the early Keynesians policy was among the Great Depression

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

A) fiscal; tight

B) fiscal; easy

C) monetary; tight

D) monetary; easy

 

33) Periods of price deflation, such as the Great Depression, are characterized by

A) low nominal rates but high real rates of interest.

B) low nominal and real interest rates.

C) real rates of interest lower than the nominal rate of interest.

D) high nominal and real rates of interest.

 

34) Monetarists contend that

A) monetary policy affects aggregate demand solely through investment.

B) monetary policy may affect aggregate demand through many channels.

C) a weak link between nominal interest rates and investment spending implies monetary policy ineffectiveness.

D) monetary policy affects aggregate demand solely through consumption.

 

35) In the early 1960s, monetarists used reduced-form timing, statistical, and historical evidence to show that

A) fiscal policy had a strong impact on economic activity.

B) monetary policy had a strong impact on economic activity.

C) monetary policy had a weak impact on economic activity.

D) neither monetary nor fiscal policy had a strong impact on economic activity.

 

36) In a study published in 1963, Milton Friedman and Anna Schwartz found that in every business cycle they studied over nearly a hundred-year period, the growth rate of the ________ decreased before ________ decreased.

A) money supply; interest rates

B) money supply; output

C) budget deficit; interest rates

D) budget deficit; output

37) Friedman and Schwartz found that the rate of money growth fell prior to business cycle downturns in

A) about three out of every four instances.

B) four out of every five instances.

C) about two out of every three instances.

D) every instance studied.

 

38) In a study published in 1963, Milton Friedman and Anna Schwartz found that in every business cycle they studied over nearly a hundred-year period,

A) the growth rate of the money supply decreased before output decreased.

B) interest rates decreased before output decreased.

C) the growth rate of federal government spending decreased before output decreased.

D) the growth rate of state and local government spending decreased before output decreased.

 

39) Timing evidence is valid only if it is known that the first event is

A) endogenous.

B) exogenous.

C) a leading indicator of the second event.

D) a lagging indicator of the second event.

 

40) Because ________ evidence is of a ________ nature, there is always the possibility of reverse causation, in which output growth causes money growth.

A) historical; structural

B) statistical; structural

C) timing; structural

D) timing; reduced-form

Mar 14 2020 View more View Less

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