The Economics of Money, Banking and Financial Markets (11th 11E - Mishkin - TB chapter 16

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1、EconomicsofMoney,Banking,andFinancialMarkets,11e(Mishkin)Chapter16TheConductofMonetaryPolicy:StrategyandTactics16.1ThePriceStabilityGoalandTheNominalAnchor1)ThemostcommondefinitionthatmonetarypolicymakersuseforpricestabilityisA)lowandstabledeflation.B)aninflationrateofzeropercent.C)highandstableinfl

2、ation.D)lowandstableinflation.Answer:DAACSB:ReflectiveThinking2)InflationresultsinA)easeofplanningforthefuture.B)easeofcomparingpricesovertime.C)lowernominalinterestrates.D)difficultyinterpretingrelativepricemovements.Answer:DAACSB:ReflectiveThinking3)Economistsbelievethatcountriesrecentlysufferingh

3、yperinflationhaveexperiencedA)reducedgrowth.B)increasedgrowth.C)reducedprices.D)lowerinterestrates.Answer:AAACSB:ReflectiveThinking4)Anominalvariable,suchastheinflationrateorthemoneysupply,whichtiesdownthepriceleveltoachievepricestabilityiscalled________anchor.A)anominalB)arealC)anoperatingD)aninter

4、mediateAnswer:AAACSB:ReflectiveThinking5)Acentralfeatureofmonetarypolicystrategiesinallcountriesistheuseofanominalvariablethatmonetarypolicymakersuseasanintermediatetargettoachieveanultimategoalsuchaspricestability.SuchavariableiscalledanominalA)anchor.B)benchmark.C)tether.D)guideline.Answer:AAACSB:

5、ReflectiveThinking26Copyright©2016PearsonEducation,Inc.6)AnominalanchorpromotespricestabilitybyA)outlawinginflation.B)stabilizinginterestrates.C)keepinginflationexpectationslow.D)keepingeconomicgrowthlow.Answer:CAACSB:ReflectiveThinking7)Monetarypolicyisconsideredtime-inconsistentbecauseA)ofthelagti

6、mesassociatedwiththeimplementationofmonetarypolicyanditseffectontheeconomy.B)policymakersaretemptedtopursuediscretionarypolicythatismorecontractionaryintheshortrun.C)policymakersaretemptedtopursuediscretionarypolicythatismoreexpansionaryintheshortrun.D)ofthelagtimesassociatedwiththerecognitionofapot

7、entialeconomicproblemandtheimplementationofmonetarypolicy.Answer:CAACSB:ReflectiveThinking8)Thetime-inconsistencyproblemwithmonetarypolicytellsusthat,ifpolicymakersusediscretionarypolicy,thereisahighe