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ECON430 Fall 2014 QUIZ 4




Question;University of Maryland University College;MONEY & BANKING ECON 430;Fall 2014;QUIZ 4 Type your;name here=?;(Use multiple paragraphs when;needed.);#1: How does the;Keynesian transmission mechanism;purportedly work?;#2: How does the Monetarist;transmission mechanism purportedly;work?;#3: What is the difference;between the Short Run Aggregate Supply function and the Long Run Aggregate;Supply function and why is this distinction important?;#4 Is it possible for;monetary policy to impact the Long Run Aggregate Supply function? What is your;reasoning?;#5What does the theory of ?Rational;Expectations? indicate regarding monetary policy?;#6 Explain the Rational;Expectations theory.;#7What is the ?Liquidity Preference Theory? and why is it;important to monetary policy considerations?;#8 Explain how expansionary fiscal policy affects the Keynesian Cross;model. You may want to scan you diagrams;to respond.;#9How does unexpected inflation impact transaction costs?;#10Describe the basic theory regarding Money Demand from a;Keynesian perspective.;Bonus Question: OPTIONAL (3 points each);Bonus #1: Use a theory from this course to explain the;Great Depression.;Bonus #2: Use a theory from this course to explain the;2008 financial crisis.


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