the economics of money, banking, and financial markets

798 "

© 2014 Pearson Canada Inc."

9. 
   

   Which of the following is most likely to lead to inflationary monetary policy?
   A) Declining oil prices
   B) Resolution of conflict in the Middle East
   C) The enactment of a free-trade agreement with Mexico
   D) Rising unemployment
   Answer: D
   Diff: 2 Type: MC Page Ref: 614 - 615
   Skill: Recall
   Objective List: 25.3 Describe whether monetary policy should be activist or passive

   
   


10. 
    

    Which of the following is most likely to lead to inflationary monetary policy?
    A) Declining oil prices
    B) Resolution of conflict in the Middle East
    C) The enactment of a free-trade agreement with Mexico
    D) Rising government budget deficits
    Answer: D
    Diff: 2 Type: MC Page Ref: 613 - 615
    Skill: Recall
    Objective List: 25.3 Describe whether monetary policy should be activist or passive

    
    


11. 
    

    Because policies in Canada were too expansionary from 1965 through 1973, Canada suffered
    ____.
    A) demand-pull inflation
    B) cost-push inflation, as workers sought higher wages in order to keep up with inflation
    C) both demand-pull and cost-push inflation
    D) neither demand-pull nor cost-push inflation
    Answer: A
    Diff: 2 Type: MC Page Ref: 614 - 615
    Skill: Applied
    Objective List: 25.3 Describe whether monetary policy should be activist or passive