the economics of money, banking, and financial markets

824 $

© 2014 Pearson Canada Inc.$

9. 
   

   A rule that is advocated by the monetarists is the ____ rule.
   A) constant money growth rate
   B) escalating money growth rate
   C) fiscal expansionism
   D) interest rate sterlization
   Answer: A
   Diff: 2 Type: MC Page Ref: 622
   Skill: Recall
   Objective List: 26.2 Characterize the discretionary versus nondiscretionary and rules versus
   discretion policy debates

   
   


10. 
    

    An example of a rule used in non-discretionary monetary policy is ____.
    A) the Taylor rule
    B) the Taylor principle
    C) Keynesian rule
    D) interest rate consistency
    Answer: A
    Diff: 2 Type: MC Page Ref: 622
    Skill: Recall
    Objective List: 26.2 Characterize the discretionary versus nondiscretionary and rules versus
    discretion policy debates

    
    


11. 
    

    One example where a rules based approach would have improved the economy is ____.
    A) the Great Depression
    B) the financial crisis in 2007
    C) the subprime mortgage markets
    D) derivatives trading
    Answer: A
    Diff: 2 Type: MC Page Ref: 622
    Skill: Recall
    Objective List: 26.2 Characterize the discretionary versus nondiscretionary and rules versus
    discretion policy debates

    
    


12. 
    

    The political business cycle can lead to ____.
    A) expansionary monetary policy
    B) expansionary fiscal policy
    C) corruption
    D) both A and B
    Answer: D
    Diff: 2 Type: MC Page Ref: 622
    Skill: Recall
    Objective List: 26.2 Characterize the discretionary versus nondiscretionary and rules versus
    discretion policy debates