Economics of Money, Banking and Financial Markets 12th edition by Frederic Mishkin Test bank
A) there is a strong positive association between inflation and growth rate of money over long periods of time.
B) there is little support for the assertion that "inflation is always and everywhere a monetary phenomenon."
C) countries with low monetary growth rates tend to experience higher rates of inflation, all else being constant.
D) money growth is clearly unrelated to inflation.
Answer: A
Ques Status: Previous Edition
AACSB: Reflective Thinking
16) Countries that experience very high rates of inflation may also have
A) balanced budgets.
B) rapidly growing money supplies.
C) falling money supplies.
D) constant money supplies.
Answer: B
Ques Status: Previous Edition
AACSB: Reflective Thinking
17) Between 1950 and 1980 in the U.S., interest rates trended upward. During this same time period
A) the rate of money growth declined.
B) the rate of money growth increased.
C) the government budget deficit (expressed as a percentage of GNP) trended downward.
D) the aggregate price level declined quite dramatically.
Answer: B
Ques Status: Previous Edition
AACSB: Reflective Thinking
18) The management of money and interest rates is called ________ policy and is conducted by a nation's ________ bank.
A) monetary; superior
B) fiscal; superior
C) fiscal; central
D) monetary; central
Answer: D
Ques Status: Previous Edition
AACSB: Application of Knowledge
19) The organization responsible for the conduct of monetary policy in the United States is the
A) Comptroller of the Currency.
B) U.S. Treasury.
C) Federal Reserve System.
D) Bureau of Monetary Affairs.
Answer: C
Ques Status: Previous Edition
AACSB: Application of Knowledge
20) ________ policy involves decisions about government spending and taxation.
A) Monetary
B) Fiscal
C) Financial
D) Systemic
Answer: B
Ques Status: Previous Edition
AACSB: Application of Knowledge
21) When tax revenues are greater than government expenditures, the government has a budget
A) crisis.
B) deficit.
C) surplus.
D) revision.
Answer: C
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AACSB: Application of Knowledge
22) A budget ________ occurs when government expenditures exceed tax revenues for a particular time period.
A) deficit
B) surplus
C) surge
D) surfeit
Answer: A
Ques Status: Previous Edition
AACSB: Application of Knowledge
23) Budgets deficits can be a concern because they might
A) ultimately lead to higher inflation.
B) lead to lower interest rates.
C) lead to a slower rate of money growth.
D) lead to higher bond prices.
Answer: A
Ques Status: Previous Edition
AACSB: Reflective Thinking
24) Budget deficits are important because deficits
A) cause bank failures.
B) always cause interest rates to fall.
C) can result in higher rates of monetary growth.
D) always cause prices to fall.
Answer: C
Ques Status: Previous Edition