Exam 12: Monetary and fiscal policy

The recession of 2001 was very short lived since

Fiscal policy becomes more powerful in changing the level of output as

Monetary policy becomes more effective as

In the classical case,

In an IS-LM model, if the government enacts restrictive fiscal policy through a tax increase or a cut in government purchases,

In an IS-LM model, if net exports is no longer assumed to be exogenous (that is, NX = NX?), but instead is assumed to decrease as the level of income increases (that is, NX = NX? - mY, with m > 0), then

The LM-curve is vertical when

In which country did nominal interest rates drop slightly below zero percent in 2012?

In a normal IS-LM framework, crowding out may be avoided if

Assume the government wants to increase the level of consumption and investment.Which of the following policies should be implemented?

If we have a normal IS-curve but a horizontal LM-curve,

When the government employs a "tight fiscal policy," we should expect that

An interesting aspect of the recession of 1990/91 was that

The transmission mechanism

Expansionary fiscal policy can be successful without a negative impact on the level of investment if

Crowding out

Which of the following describes a part of the transmission mechanism?

The liquidity trap exists when

The view that "only money matters" is accurate when

When bankers talk about "one basis point," they generally refer to a change in