the economics of money, banking, and financial markets

721 $

© 2014 Pearson Canada Inc.$

12. 
    

    Everything else held constant, a monetary expansion is characterized by ____ output
    and ____ interest rates.
    A) rising; rising
    B) rising; falling
    C) falling; rising
    D) falling; falling
    Answer: B
    Diff: 2 Type: MC Page Ref: 561
    Skill: Recall
    Objective List: 23.2 Explain how the IS - MP model can be used to address questions about the
    effectiveness of monetary and fiscal policy

    
    


13. 
    

    A contractionary monetary policy shifts the MP curve to the ____, reducing ____,
    everything else held constant.
    A) left; output and increasing interest rates
    B) left; both real output and interest rates
    C) right; both interest rates and real output
    D) right; interest rates and increasing real output
    Answer: A
    Diff: 2 Type: MC Page Ref: 561
    Skill: Recall
    Objective List: 23.2 Explain how the IS - MP model can be used to address questions about the
    effectiveness of monetary and fiscal policy

    
    


14. 
    

    Everything else held constant, a monetary contraction is characterized by ____ output
    and ____ interest rates.
    A) rising; rising
    B) rising; falling
    C) falling; rising
    D) falling; falling
    Answer: C
    Diff: 2 Type: MC Page Ref: 561
    Skill: Recall
    Objective List: 23.2 Explain how the IS - MP model can be used to address questions about the
    effectiveness of monetary and fiscal policy