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Early Keynesians viewed monetary policy as influencing aggregate demand solely through
its impact on ____ interest rates, which, in turn, affect ____ spending.
A) nominal; consumer
B) nominal; investment
C) real; consumer
D) real; investment
Answer: B
Diff: 2 Type: MC Page Ref: 27.1A- 5
Skill: Recall
Objective List: Appendix: Evaluating Empirical Evidence
Early Keynesians believed that ____ interest rates during the Great Depression
indicated that monetary policy was ____.
A) high; easy
B) high; tight
C) low; easy
D) low; tight
Answer: C
Diff: 2 Type: MC Page Ref: 27.1A- 4
Skill: Recall
Objective List: Appendix: Evaluating Empirical Evidence
Early Keynesians believed that low ____ during the Great Depression indicated that
____ policy was easy.
A) money growth; fiscal
B) money growth; monetary
C) interest rates; fiscal
D) interest rates; monetary
Answer: D
Diff: 2 Type: MC Page Ref: 27.1A- 4
Skill: Recall
Objective List: Appendix: Evaluating Empirical Evidence
Early Keynesians concluded that changes in monetary policy had no impact on aggregate
output because early empirical studies found no linkage between movements in ____ and
____.
A) nominal interest rates; investment spending
B) real interest rates; investment spending
C) money supply; aggregate output
D) investment spending; aggregate output
Answer: A
Diff: 2 Type: MC Page Ref: 27.1A- 4
Skill: Recall
Objective List: Appendix: Evaluating Empirical Evidence