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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
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
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
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