Which of the following is correct?
a. Monetarists believe there is no short-term link between changes in a nation's money supply and changes in expenditures.
b. Monetarists believe there is an indirect link between changes in a nation's money supply and changes in expenditures.
c. Monetarists believe there is a direct link between changes in a nation's money supply and changes in expenditures.
d. Keynesians believe there is a direct link between changes in a nation's money supply and changes in expenditures.
e. None of the above.
Question 2 - Assume the central bank decides to raise the discount rate. Where and how should you begin your analysis when analyzing the chain reaction of economic interactions?
a. Start the analysis in the real goods market with aggregate demand shifting to the right.
b. Start the analysis in the real credit market with demand for real credit shifting to the left.
c. Start the analysis in the real credit market with demand for real credit shifting to the right.
d. Start the analysis in the real credit market with supply of real credit shifting to the left.
e. Start the analysis in the real credit market with supply of real credit shifting to the right.
Question 3 - Which of the following is correct?
a. Keynesians believe there is a direct link between changes in a nation's money supply and changes in expenditures.
b. Monetarists believe there is an indirect link between changes in a nation's money supply and changes in expenditures.
c. Monetarists believe there is a direct link between changes in a nation's money supply and changes in expenditures.
d. Monetarists believe there is no short-term link between changes in a nation's money supply and changes in expenditures.
e. Keynesians believe there is no short-term link between changes in a nation's money supply and changes in expenditures.
Question 4 - Assume the central bank decides to pursue contractionary monetary policy. Where and how should you begin your analysis when analyzing the chain reaction of economic interactions?
a. Start the analysis in the real goods market with aggregate demand shifting to the left.
b. Start the analysis in the real goods market with aggregate demand shifting to the right.
c. Start the analysis in the real credit market with demand for real credit shifting to the left.
d. Start the analysis in the real credit market with demand for real credit shifting to the right.
e. Start the analysis in the real credit market with supply of real credit shifting to the left.
Question 5 - Which of the following is correct?
a. Keynesians believe there is a direct link between changes in a nation's money supply and changes in expenditures.
b. Monetarists believe there is no short-term link between changes in a nation's money supply and changes in expenditures.
c. Keynesians believe there is no short-term link between changes in a nation's money supply and changes in expenditures.
d. Keynesians believe there is an indirect link between changes in a nation's money supply and changes in expenditures.
e. None of the above.
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