The chain of events that results from an expansionary monetary policy is ?

Related Mcqs:

1. If a country’s policy makers were to continuously use expansionary monetary policy in an attempt to hold unemployment below the natural rate the long-run result would be ?

   A. an increase in the level of output
   B. a decrease in the unemployment rate
   C. an increase in the rate of inflation
   D. All of these answers

2. An example of an expansionary monetary policy is ?

   A. a reduction in the taxes banks pay on their profits.
   B. an increase in the required reserve ratio
   C. an increase in the discount rate
   D. the Central bank buying government securities in the open market

3. Expansionary monetary policy ?

   A. tends to lead to an appreciation of a nation’s currency
   B. tends to lead to a depreciation of a nation’s currency
   C. usually has no effect on a currency’s exchange value
   D. tends to lead to a depreciation of the currencies of other nations

4. If the state Bank of Pakistan wished to pursue an expansionary monetary policy it would ?

   A. increase the minimum reserve asset ratio.
   B. buy government securities on the open market
   C. raise interest rates
   D. sell government securities on the open market

5. According to the Phillips curve, in the short run, if policy makers choose an expansionary policy to lower the rate of unemployment ?

   A. The economy will experience an increase in inflation
   B. The economy will experience a decrease in inflation
   C. Inflation will be unaffected if price expectations are unchanging
   D. None of these answers

6. Expansionary fiscal policy in the classical model will cause aggregate demand to _______ potential output?

   A. exceeds
   B. fall below
   C. fluctuate around
   D. remain equal to

7. In the early eighties, the Federal Reserve pursed a tight monetary policy. All else being equal. the impact of that policy was to interest rates in the United States relative to those in Europe and cause the dollar to _______ against European currencies?

   A. decrease; depreciate
   B. decrease; appreciate
   C. increase; depreciate
   D. increase; appreciate

8. One of the transmission mechanisms of monetary policy is through consumer demand when interest rates ________ household wealth ________ and consumption _________?

   A. rise; increase, increase
   B. rise, falls, increase
   C. rise, increase, falls
   D. rise, falls, falls

9. The three main tools of monetary policy are ?

   A. fiat, commodity and deposit money
   B. Open-market operations reserve requirements and the refinancing rate
   C. The money supply, government purchases and taxation
   D. Government expenditures taxation and reserve requirements
   E. Coin, currency and demand deposits

10. If the economy is in the expansionary phase of the business cycle, aggregate demand ____ unemployment ____ inflation ____ payments is likely to move towards ____?

    A. falls; rise; falls; surplus
    B. is static; low; rise; deficit;
    C. falls; falls; falls; surplus
    D. rise; falls; rises; deficit