the economics of money, banking, and financial markets

807 "

© 2014 Pearson Canada Inc."

25. 
    

    A(n) ____ of reduced-form evidence is that it cannot rule out ____.
    A) disadvantage; reverse causation
    B) disadvantage; adverse selection
    C) advantage; reverse causation
    D) advantage; adverse selection
    Answer: A
    Diff: 3 Type: MC Page Ref: 641
    Skill: Recall
    Objective List: 25.1 Express the different types of empirical evidence

    
    


26. 
    

    When using reduced-form evidence to evaluate monetary policy and find that M affects Y,
    ____.
    A) it is possible that we may suffer from reverse causation
    B) we are sure that there is no reverse causation
    C) there is never adverse selection
    D) there is never moral hazard
    Answer: A
    Diff: 2 Type: MC Page Ref: 641
    Skill: Recall
    Objective List: 25.1 Express the different types of empirical evidence

    
    


27. 
    

    When the ____ has an interest rate target, ____ output might lead to a ____
    money supply.
    A) Bank of Canada; higher; higher
    B) Bank of Canada; higher; lower
    C) Ministry of Finance; higher; higher
    D) Ministry of Finance; lower; lower
    Answer: A
    Diff: 3 Type: MC Page Ref: 641
    Skill: Recall
    Objective List: 25.1 Express the different types of empirical evidence

    
    


28. 
    

    When the Bank of Canada has an interest rate target, ____ output might lead to a
    ____ money supply.
    A) higher; higher
    B) higher; lower
    C) higher; stable
    D) lower; lower
    Answer: A
    Diff: 3 Type: MC Page Ref: 641
    Skill: Recall
    Objective List: 25.1 Express the different types of empirical evidence