Exam 17: Macroeconomic Policy I: Monetary Policy

The velocity of money is equal to nominal GDP divided by the money supply.

According to the quantity theory of money, if the money supply doubles, the:

A volatile velocity of money is, according to Keynesians, equivalent to saying:

With a fixed exchange rate, the RBA:

If the velocity of money is constant then the money supply will also be constant.

The expression, 'Don't do something, just stand there' applies to economists who favour a/an _____ approach to monetary policy.

Financial innovation in Australia during the 1980s led to:

According to Keynesians, for monetary policy to have a stimulative effect on GDP, a/an:

Which of the following is a belief of the monetarists?

Monetarists argue that using active discretionary monetary policy is dangerous because it is subject to:

Monetarists argue that the central bank should allow the money supply to grow:

If the central bank follows a rules-based approach to monetary policy and the velocity of money turns out to be larger than expected, then inflation:

When the velocity of money is unstable, a rules-based approach to monetary policy is likely to be extremely effective.

While the classicists believed that both velocity and output are stable, Keynesians believe:

The 'conditional-projection' approach used by the Australian government in monetary policy between 1976 and 1985 was based on:

Monetarists argue that setting a specific target for money supply is the best policy because:

When the RBA sells government securities:

Since the early 1990s, the RBA has implemented monetary policy primarily by focusing on:

The monetarists argued that to avoid inflation and unemployment, that:

Which of the following is true?