(Solution)-The introduction of daily interest saving accounts

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10. "The introduction of daily interest saving accounts attracted a growing portion of funds away from checking accounts. The upshot was that a given amount of M1 supported a higher level of total spending, or in other words, its ______ increased." Fill in the blank.a) velocity b) money multiplier c) income multiplier d) reserve requirement11. "The problem with monetarism is that its advocates have seen it as infallible over short periods of time and wish it to be rigid in its application over all periods of time." The advocates of monetarism wish it to be rigid in its application over all periods of time toa) weaken fiscal policy b) avoid monetary policy errorsc) strengthen the impact of monetary policyd) ensure the independence of the central bank12. "I really don't believe monetary policy is a very useful tool for fine-tuning the business cycle or fighting unemployment directly. I do believe that what monetary policy can do is control the inflation rate." Those who don't believe that monetary policy is a very useful tool for fine-tuning the business cycle believe thata) monetary authorities never make mistakesb) monetary policy has long and variable lags 51c) the central bank has tight control over the money supplyd) monetary authorities have accurate information about the state of the economy

 

Solution ID:10086547 | Question answered on 16-Oct-2016

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