By lowering short-term interest rates, a central bank can stimulate economic activity
A: since it encourages more investment spending
B: since more durable consumption goods will be bought
C: but only in the short run
D: but it may lead to a higher price level
E: all of the above
A: since it encourages more investment spending
B: since more durable consumption goods will be bought
C: but only in the short run
D: but it may lead to a higher price level
E: all of the above
举一反三
- In the short run, a central bank can most easily stimulate economic activity by A: selling government bonds to the public B: raising interest rates to make investments more profitable C: lowering the inflation rate though monetary restriction D: influencing aggregate supply through monetary expansion E: influencing aggregate demand and accepting a higher price level in the future
- Which of the following is NOT a result of monetary policy? A: aggregate demand is affected, leading to a change in nominal GDP B: the level of potential GDP will change C: spending on investment and durable consumption goods is affected D: the rates of unemployment and inflation are affected in the short run E: real interest rates will remain unaffected in the long run
- Countries with higher saving rates may have higher equilibrium growth rates since A: people who save more also are more industrious B: higher income allows for more savings C: a higher saving rate allows for more investment in human capital which ultimately enhances economic growth D: having more capital equipment is more important than having better capital equipment E: none of the above
- Which of the following is FALSE? A: in the long run, a central bank can effectively limit inflation B: in the long run, a central bank can do fairly little to stimulate real GDP C: in the long run, monetary policy has no effect on nominal GDP D: unless inflation is very high, stimulating the economy does more to enhance economic welfare than controlling inflation E: a central bank can lower the inflation rate but only by allowing for a loss in real GDP, at least in the short run
- If a central bank wants to avoid high inflation in an economic boom it can A: try to lower investment spending though open market purchases B: raise interest rates in an effort to affect aggregate supply C: lower bank reserves by buying government bonds D: decrease the level of potential GDP by permanently restricting money supply growth E: none of the above