Reading 28: Monetary Policy - LOS b～ Q1-3

答案和详解如下：

1.Under a feedback-rule monetary policy:

A)   a decrease in aggregate demand triggers a decrease in money supply growth.

B)   an increase in aggregate demand triggers an increase in money supply growth.

C)   actions are designed to maintain aggregate demand at the full employment level.

D)   the policy is set independently of changes in real GDP.

The correct answer was C)

Under a feedback-rule monetary policy, the policy is altered depending upon changes in aggregate demand. A decrease (increase) in aggregate demand triggers an increase (decrease) in money supply growth. The actions taken are designed to maintain aggregate demand at a level that is consistent with full employment.

2.Under a fixed-rule monetary policy:

A)   actions are designed to maintain aggregate demand at the full employment level.

B)   a decrease in aggregate demand triggers a decrease in money supply growth.

C)   an increase in aggregate demand triggers an increase in money supply growth.

D)   the policy is set independently of changes in real GDP.

The correct answer was D)

Under a fixed-rule monetary policy, the parameters of the policy are set independently of changes in real GDP. The objective is to achieve long-term price stability.

3.Which of the following statements concerning monetary policy is most likely to be correct? Monetary policy changes affect the economy:

A)   with a significant lag.

B)   as soon as they are implemented.

C)   as soon as they are announced.

D)   by stimulating or dampening aggregate supply.

The correct answer was A)    

Monetary policy changes tend to affect the economy via aggregate demand, but only after a significant lag. Consequently, changes in policy designed to stimulate (dampen) the economy may occur after the economy has been to recover (decelerate) and may make economic cycles more severe.