the economics of money, banking, and financial markets

550 $

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11. 
    

    Which of the following criteria need not be satisfied for choosing an intermediate target?
    A) The variable must be measurable.
    B) The variable must be controllable.
    C) The variable must be predictable.
    D) The variable must be stable.
    Answer: D
    Diff: 1 Type: MC Page Ref: 455 - 457
    Skill: Recall
    Objective List: 18.1 Assess the different types of monetary policy strategy

    
    


12. 
    

    Which of the following is not a requirement in selecting an intermediate target?
    A) Measurability
    B) Controllability
    C) Flexibility
    D) Predictability
    Answer: C
    Diff: 1 Type: MC Page Ref: 455 - 457
    Skill: Recall
    Objective List: 18.1 Assess the different types of monetary policy strategy

    
    


13. 
    

    When it comes to choosing an policy instrument, both the ____ rate and ____
    aggregates are measured accurately and are available daily with almost no delay.
    A) three-month T-bill; monetary
    B) three-month T-bill; reserve
    C) overnight rate; monetary
    D) overnight rate; reserve
    Answer: D
    Diff: 1 Type: MC Page Ref: 456
    Skill: Recall
    Objective List: 18.1 Assess the different types of monetary policy strategy

    
    


14. 
    

    Which of the following best explains why the Bank of Canada does not use nominal GDP as
    an intermediate target?
    A) Nominal GDP has little connection with Bank policy goals.
    B) Nominal GDP is unaffected by open market operations.
    C) The Bank has little direct control over nominal GDP.
    D) None of the above.
    Answer: C
    Diff: 2 Type: MC Page Ref: 455 - 457
    Skill: Applied
    Objective List: 18.1 Assess the different types of monetary policy strategy