WorksheetsMonetarism Quiz Zack and Sam
Total questions: 15
Worksheet time: 8mins
What is the primary determinant of economic growth according to monetarism?
Tax rates
Consumer confidence
Money supply
Government spending
Who is closely associated with the theory of monetarism?
David Ricardo
Milton Friedman
Adam Smith
John Maynard Keynes
What does the quantity theory of money state?
Money supply multiplied by the rate at which money is spent equals nominal expenditures
Consumer confidence is the key to economic stability
Government spending determines economic growth
Tax rates are the primary driver of economic growth
What is the formula for the quantity theory of money?
M + V = P + Q
M / V = P / Q
M - V = P - Q
M * V = P * Q
What does 'M' represent in the quantity theory of money?
Price level
Velocity
Quantity of goods and services
Money supply
What does 'V' represent in the quantity theory of money?
Money supply
Velocity
Price level
Quantity of goods and services
What does 'P' represent in the quantity theory of money?
Money supply
Velocity
Price level
Quantity of goods and services
What does 'Q' represent in the quantity theory of money?
Quantity of goods and services
Price level
Velocity
Money supply
What is the K-percent rule proposed by Milton Friedman?
Consumer confidence should be maintained at a steady level
Money supply should grow at a constant annual rate tied to the growth of nominal GDP
Government spending should increase by a fixed percentage each year
Tax rates should be adjusted based on inflation
What is the primary tool used in monetarism to control the money supply?
Trade policy
Tax policy
Monetary policy
Fiscal policy
What happens when interest rates are increased according to monetarism?
Inflation rises
People have more incentive to save
Money supply increases
Economic growth accelerates
What is the effect of lowering interest rates in an expansionary monetary scheme?
Cost of borrowing increases
People borrow and spend more
People save more
Money supply contracts
What was the primary goal of Paul Volcker when he became Chairman of the Federal Reserve in 1979?
Increase government spending
Combat inflation
Reduce taxes
Boost consumer confidence
What was the result of Paul Volcker's policies in the early 1980s?
Economic boom
Big recession
Stable economic growth
Increased inflation
What was the impact of Margaret Thatcher's monetarist policies in Britain by 1983?
Unemployment increased
Economic growth stagnated
Inflation doubled
Inflation was halved
