Chapter 15 Monetary Policy: Pre-Class & In-Class Activities Packet Name/I.D. Number: ___________________________________________ Section:___________ Date:___________ Part 3. Discussion Questions and Problems 2. Explain how the Keynesian transmission mechanism works. ______________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________ 4. Argue the case for and against a monetary rule. ______________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________ 6. According to market monetarists, what problems might arise from a sharp decline in Nominal GDP? ______________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________ 8. The Keynesian transmission mechanism allows the link between the money market and the goods and services market unless this link is broken because of the following reasons: ______________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________ ______________________________________________________________________________________________________________________ 10. What is Liquidity Trap? ______________________________________________________________________________________________________________________ 4

Economics

Roger A Arnold

Thirteenth Edition