Which of the following central bank policies would be pro-cyclical?

Question 1 (1 point) The Taylor Rule is used by a central bank that is targeting Question 1 options: Show more Question 1 (1 point) The Taylor Rule is used by a central bank that is targeting Question 1 options: monetary aggregates. a short term interest rate. bank reserves. none of the above. Save Question 2 (1 point) Which of the following affects the exchange rate in the short run? Question 2 options: expected relative price level foreign interest rate expected future exchange rate all of the above Save Question 3 (1 point) If a central bank is following a policy of fixing an interest rate at a constant value then if the economy expands the bank will respond by Question 3 options: shifting the demand for money to the left. shifting the demand for money to the right. shifting the supply of money to the left. shifting the supply of money to the right. Save Question 4 (1 point) An increase in a countrys trade barriers will cause the _____ for its currency to shift to the Question 4 options: demand left. demand right. supply left. supply right. Save Question 5 (1 point) Which of the following factors affects the exchange rate in the short run but not the long run? Question 5 options: domestic interest rate relative expected trade barriers relative import demand They all affect the short and long run exchange rate. Save Question 6 (1 point) A central bank would increase interest rates to Question 6 options: lower inflation. raise employment. stimulate the economy. all of the above. Save Question 7 (1 point) If the euro/dollar exchange rate is 1.20 euro/dollar and an American washing machine costs $250 assuming no trade barriers or transportation costs what is the euro price of the washing machine? Question 7 options: 200e 250e 300e none of the above Save Question 8 (1 point) The adoption of inflation targeting has often led to problems in the Question 8 options: short run. long run. both of the above. neither of the above. Save Question 9 (1 point) If the exchange rate betweent the euro and the dollar is currently 1 to 1 and from the perspective of the dollar the exchange rate appreciates by 25% how much does the euro depreciate by? Question 9 options: 20% 25% 30% none of the above Save Question 10 (1 point) The advantage of having a strong currency is it Question 10 options: makes imports more expensive. makes exports more expensive. makes interest rates lower. none of the above. Save Question 11 (1 point) When monetary policymakers are unable to solve the time consistency problem the primary result is Question 11 options: low growth. high unemployment. high inflation. none of the above. Save Question 12 (1 point) A rise in the real interest rate in a country causes its currency to Question 12 options: appreciate. depreciate. remain unchanged. cannot be determined. Save Question 13 (1 point) A central bank would lower interest rates to Question 13 options: decrease inflation. raise unemployment. stimulate GDP growth. all of the above. Save Question 14 (1 point) The theory that in the long run exchange rates will reflect the prices within two countries or across countries is known as: Question 14 options: theory of one price purchasing power parity equilibrium exchange rates none of the above Save Question 15 (1 point) Which of the following central bank policies would be pro-cyclical? Question 15 options: fixing an interest rate at a constant value fixing the money supply at a constant value inflation targeting none of the above Save Question 16 (1 point) Fears of _____ could cause a domestic currency to depreciate. Question 16 options: a stock market crash easy monetary policy government bond default all of the above Save Question 17 (1 point) According to the Taylor Rule if the output gap rises by 2% and inflation rises by 1% when inflation is 4% currentyl and the real equilibrium federal funds rate is 0.5% what is the target federal funds rate Question 17 options: 7.50% 6.00% 3.00% 3.50% Save Question 18 (1 point) The law of one price would apply to which of the following goods or services sold in Japan and Australia? Question 18 options: office building auto repair manicure none of the above Save Question 19 (1 point) If the foreign interest rate is 15% the current exchange rate is 10.0 and the expected future exchange rate is 11.0 what is the domestic interest rate according to the interest parity condition? Question 19 options: 5% 14% 25% none of the above Save Question 20 (1 point) A central bank would decrease the money supply to Question 20 options: lower inflation. lower employment. lower GDP growth. all of the above. Show less

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