the economics of money, banking, and financial markets

871 $

© 2014 Pearson Canada Inc.$

37. 
    

    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

    
    


38. 
    

    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

    
    


39. 
    

    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

    
    


40. 
    

    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