Monetary policy is best conducted by
A. focusing on a sustainable goal rather than maintaining full employment at all times
B. decisive major policy changes rather than modest steps
C. changing policies frequently to keep financial markets guessing what will happen next
D. keeping the interest rate at the lowest sustainable level no matter what
E. none of the above
查看答案
When a central bank engages in inflation targeting
A. unemployment isn’t affected since nominal interest rates are kept very low
B. interest rates are raised substantially as soon as the output gap increases
C. interest rate stability is an explicit policy goal
D. little weight is give to transparency
E. little or no weight is given to the output gap
When a central bank engages in inflation targeting, then
A. interest rate stability will automatically result
B. interest rates need to be raised as soon as the output gap starts to shrink
C. the Taylor rule can still be used as a guide as long as the output coefficient is set to zero
D. the Taylor rule can still be used as a guide as long as the output coefficient has a lot of weight
E. none of the above
If a central bank follows an activist monetary policy rule,
A. full employment can always be maintained with little or no inflation
B. financial markets always need advance notice of any policy change so the central bank does not lose its credibility
C. the focus is generally on expected future economic conditions while current economic conditions are ignored
D. the focus is generally on the long-run inflation rate with little concern about unemployment
E. none of the above
Assume the Fed wants to stimulate economic activity through expansionary monetary policy. Which of the following is FALSE?
A. investment spending will increase
B. spending on durable goods will increase
C. aggregate demand will be stimulated
D. the expansionary effect will only be temporary
E. real money balances will increase as we move along the AD-curve from left to right
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