Exam 17: Macroeconomic Policy I: Monetary Policy

Keynesians argue that the velocity of money is:

Monetary targeting was abandoned in Australia because:

If M stands for the money supply, V for the velocity of money, P for the average selling price, and Q for the output of goods and services, the equation of exchange is:

Under a fixed exchange rate system, an excess demand for the Australian dollar in the FOREX market often resulted in:

Since classical economists believe that both V and Q are constants for an economy in short-run equilibrium, the equation of exchange becomes a theory in which:

The Australian inflation rate was:

The policy effectiveness lag refers to the time it takes for:

To influence the cash rate, the RBA:

Today Australia has:

The RBA believes that by keeping inflation low and steady it can assist with:

According to Keynes:

Countercyclical macroeconomic policy is favoured by:

If the RBA wants to reduce inflation in the economy, it is likely to:

Which of the following statements is most likely to be true?

The monetarist transmission mechanism, through which monetary policy affects the price level, real GDP and employment, depends on the:

Narrbegin Exhibit 16.1 -According to Exhibit 16.1, if the economy is currently operating at point A, the RBA is likely to:

According to the equation of exchange, the money supply multiplied by the average number of times per year a dollar is spent on final goods and services is equal to:

'Smoothing' operations of the RBA are intended to be:

The time taken to decide on an appropriate policy response is known as the:

The primary goal of the RBA is to: