the economics of money, banking, and financial markets

812 "

© 2014 Pearson Canada Inc."

45. 
    

    Movements of ____ interest rates indicate that, contrary to the early Keynesians' beliefs,
    monetary policy was ____ during the Great Depression.
    A) nominal; tight
    B) nominal; easy
    C) real; tight
    D) real; easy
    Answer: C
    Diff: 2 Type: MC Page Ref: 644
    Skill: Recall
    Objective List: 25.1 Express the different types of empirical evidence

    
    


46. 
    

    Movements of real interest rates indicate that, contrary to the early Keynesians' beliefs,
    ____ policy was ____ during the Great Depression.
    A) fiscal; tight
    B) fiscal; easy
    C) monetary; tight
    D) monetary; easy
    Answer: C
    Diff: 2 Type: MC Page Ref: 644
    Skill: Recall
    Objective List: 25.1 Express the different types of empirical evidence

    
    


47. 
    

    Periods of price deflation, such as the Great Depression, are characterized by ____.
    A) low nominal rates but high real rates of interest
    B) low nominal and real interest rates
    C) real rates of interest lower than the nominal rate of interest
    D) high nominal and real rates of interest
    Answer: A
    Diff: 2 Type: MC Page Ref: 644
    Skill: Applied
    Objective List: 25.1 Express the different types of empirical evidence

    
    


48. 
    

    Monetarists contend that ____.
    A) monetary policy affects aggregate demand solely through investment
    B) monetary policy may affect aggregate demand through many channels
    C) a weak link between nominal interest rates and investment spending implies monetary policy
    ineffectiveness
    D) monetary policy affects aggregate demand solely through consumption
    Answer: B
    Diff: 2 Type: MC Page Ref: 644
    Skill: Recall
    Objective List: 25.1 Express the different types of empirical evidence