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Jouer Froggy Jumps
1. Who controls monetary policy?
A
Commercial banks
B
The government
C
The central bank
2. Which of the following best describes monetary policy?
A
Changes to the money supply or interest rates
B
Changes to government spending or taxes
C
Changes to regulations
3. A monetary policy is considered expansionary if...
A
... aggregate demand ultimately decreases.
B
... short-run aggregate supply ultimately increases.
C
... aggregate demand ultimately increases.
4. A monetary policy is considered contractionary if...
A
... aggregate demand ultimately decreases.
B
... short-run aggregate supply ultimately decreases.
C
... aggregate demand ultimately increases.
5. The purpose of an expansionary monetary policy is to decrease...
A
... the unemployment rate.
B
... the price level.
C
... real GDP.
6. The purpose of a contractionary monetary policy is to decrease...
A
... the nominal interest rate.
B
... the unemployment rate.
C
... the price level.
7. Which of the following is a monetary policy used in an economy with limited reserves?
A
Changes to government spending
B
Open-market operations
C
Changes to administered interest rates
8. Which of the following is a monetary policy used in an economy with limited reserves?
A
Changes to administered interest rates
B
Changes to taxes
C
Changes to the reserve requirement
9. Which of the following is a monetary policy used in an economy with limited reserves?
A
Changes to the discount rate
B
Changes to government spending
C
Changes to taxes
10. Which of the following is a monetary policy used in an economy with ample reserves?
A
Changes to the reserve requirement
B
Changes to open-market operations
C
Changes to administered interest rates
11. Which market is used to illustrate the effect of a monetary policy on the nominal interest rate?
A
The money market
B
The reserves market
C
The loanable funds market
12. Which market is used to illustrate the effect of a monetary policy on the policy rate?
A
The reserves market
B
The money market
C
The loanable funds market
13. What is the policy rate?
A
The interest rate that commercial banks charge their best customers
B
The interest rate that the central bank charges commercial banks
C
The interest rate that banks charge each other
14. What is the discount rate?
A
The interest rate that commercial banks charge their best customers
B
The interest rate that the central bank charges commercial banks
C
The interest rate that banks charge each other
15. What is the interest on reserve balances?
A
The interest rate that bank customers earn on their savings accounts
B
The interest rate that banks earn by keeping reserves
C
The interest rate that the central bank charges commercial banks
16. What is on the y-axis of the reserves market?
A
Price level
B
Nominal interest rate
C
Policy rate
17. What is on the x-axis of the reserves market?
A
Real GDP
B
Quantity of money
C
Quantity of reserves
18. Which of the following policies would fix an inflationary gap in an economy with ample reserves?
A
An open-market sale of bonds
B
A decrease in administered interest rates
C
An increase in administered interest rates
19. Which of the following policies would fix a recessionary gap in an economy with ample reserves?
A
An increase in administered interest rates
B
A decrease in administered interest rates
C
A decrease in the reserve requirement
20. In an economy with ample reserves, how would an increase in administered interest rates affect the price level and real GDP?
A
The price level would decrease, and real GDP would decrease.
B
The price level would increase, and real GDP would increase.
C
The price level would increase, and real GDP would decrease.
21. In an economy with ample reserves, how would a decrease in administered interest rates affect the price level and real GDP?
A
The price level would increase, and real GDP would increase.
B
The price level would increase, and real GDP would decrease.
C
The price level would decrease, and real GDP would increase.
22. In an economy with ample reserves, how would an open-market purchase of bonds affect the price level and real GDP?
A
The price level would decrease, and real GDP would decrease.
B
The price level would increase, and real GDP would increase.
C
The price level would remain unchanged, and real GDP would remain unchanged.