ECO4223 Exam 2 Questions and Answers
100% Solved
In the model of fiat money developed in Lecture 7, the demand for money is the demand to
hold ________. Irredeemable Paper Bank Notes.
In the model of fiat money developed in Lecture 7, the supply of money is just the total stock
issued by th...
ECO4223 Exam 2 Questions and Answers 100% Solv ed In the model of fiat money developed in Lecture 7, the demand for money is the demand to hold ________. Irredeemable Paper Bank Notes. In the model of fiat money developed in Lecture 7, the supply of money is just the total stock issued by the central bank because fiat monies _________. have no non -monetary uses. Unlike the gold standard, there is _______ mechanism to govern the supply of money in a fiat money regime. no automatic How a central bank conducts monetary policy will depend _____. on both the information available to policymakers and the incentives policymakers face. In the 1960s and early 1970s, most economists believed there was a stable, exploitable tradeoff between _____ and ______. inflation, unemployment In the 1970s, the United States experienced _________. stagflation The (naiive) Phillips Curve was thought to represent a menu of policy options, whereby policymakers could achieve a lower unemployment rate so long as they were willing to put up with _________, and vice versa. higher inflation Notable absent from the (naiive) Phillips Curve was a reasonable assumption about _________. Inflation Expectations When inflation expectations decrease, the expectations augmented Phillips Curve shifts ________. down ECO4223 Exam 2 Questions and Answers 100% Solv ed The long run Phillips Curve is conventionally drawn as a ______ line that intersects the axis at __________. horizontal; the natural rate of unemployment, U". According to Abrams (2006), political monetary (or business) cycle political monetary cycle exists in the United States, but only when the President and the _________ share party allegiance. Federal Reserve Chair A country experiences hyperinflation when the price level grows more than __________. 50 percent per month Use the rule of 70 to calculate approximately how long it will take prices to double in a country with an inflation rate of 3 percent per month. 23.3 months (70/3) months Use the rule of 70 to calculate the approximate inflation rate in a country that has seen its price level double in 12.1 years. 5.8 percent per year (70/12/1) per year Use the rule of 70 to calculate the approximate inflation rate in a country that has seen its price level quadruple in 15.9 years. 8.8 percent per year. 15.9/2=7.95 70/7/95=8.8
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