71.Which of the following were good policy decisions to counter hyperinflation in Venezuela

a. Removing the 100-Bolivar note from circulation to avoid capital flight

b. Production cuts in oil to slow down the impact of oil-price inflation

c. Defaulting on some government bonds so as to pay off at least some of its debt

d. none of the above

72.What are potential policies to solve Venezuela's economic crisis

a. embracing more central planning and boosting relations with Russia

b. encouraging FDI to fund greater productivity in the oil sector

c. tight monetary policy

d. both b and c

73. According to the traditional interest-rate channel, expansionary monetary policy lowers the real interest rate, thereby raising expenditure on

a.business fixed investment.

b. government expenditure.

c. consumer nondurables.

d. net exports.

74.An expansionary monetary policy lowers the real interest rate, causing the domestic currency to ________, thereby ________ net exports.

a. appreciate; raising

b. appreciate; lowering

c. depreciate; raising

d. depreciate; lowering

75. Tobin's q theory suggests that monetary policy may affect investment spending through its impact on

a. stock prices.

b. interest rates.

c. bond prices.

d. cash flow.

76. According to Tobin's q theory, when q is ________, firms will not purchase new investment goods because the market value of firms is ________ relative to the cost of capital.

a. low; low

b. low; high

c. high; low

d. high; high

77. The wealth effect channel says that an expansionary monetary policy can cause stock market prices to ________ and consumption to ________.

a. increase; increase

b. increase; decrease

c. decrease; decrease

d. decrease; increase

78. The monetary transmission mechanism that links monetary policy to GDP through real interest rates and investment spending is called the

a. traditional interest-rate channel.

b. Tobins' q theory.

c. wealth effects.

d. cash flow channel.

79. Tobin's q is defined as the market value of firms ________ the replacement cost of capital.

a. times

b. minus

c. plus

d. divided by

80. A contractionary monetary policy decreases net exports by ________ interest rates and ________ the value of the dollar.

a. lowering real; decreasing

b. lowering real; increasing

c. raising nominal; increasing

d. raising real; increasing