the economics of money, banking, and financial markets

562 $

© 2014 Pearson Canada Inc.$

4. 
   

   Compared to the United States, Japan's experience with monetary targeting performed
   ____.
   A) better with regard to the inflation rate and output fluctuations
   B) worse with regard to the inflation rate and output fluctuations
   C) better with regard to the inflation rate, but worse with regard to output fluctuations
   D) worse with regard to the inflation rate, but better with regard to output fluctuations
   Answer: A
   Diff: 1 Type: MC Page Ref: 18.1A- 2
   Skill: Applied
   Objective List: 18.1 Assess the different types of monetary policy strategy

   
   


5. 
   

   What does the Bank of Japan use as its daily operating target to conduct monetary policy?
   A) Monetary aggregates
   B) Non borrowed reserves
   C) The inter-bank market interest rate
   D) Reserve aggregates
   Answer: C
   Diff: 1 Type: MC Page Ref: 18.1A- 2
   Skill: Applied
   Objective List: 18.1 Assess the different types of monetary policy strategy

   
   


6. 
   

   Since 1978, the Bank of Japan has used an interest rate as its daily operating target ____.
   A) providing additional evidence that interest rate smoothing is inconsistent with reducing
   inflation
   B) because money growth in Japan is very volatile
   C) with very good success, suggesting that an interest rate operating target is not necessarily a
   barrier to successful monetary policy
   D) Only A and C of the above.
   Answer: C
   Diff: 2 Type: MC Page Ref: 464
   Skill: Applied
   Objective List: 18.1 Assess the different types of monetary policy strategy

   
   


7. 
   

   One of the factors that contributed to the success German policymakers had using a monetary
   targeting type policy was that ____.
   A) they used a rigid target for the money growth rate
   B) they implemented policy so their inflation rate goal was met in the short run
   C) the money target was flexible to allow the Bundesbank to concentrate on other goals as
   needed
   D) they rarely communicated the intentions of policy to the public in order to keep the public
   from panicking
   Answer: C
   Diff: 2 Type: MC Page Ref: 18.1A- 3
   Skill: Applied
   Objective List: 18.1 Assess the different types of monetary policy strategy