A depreciation of the NZ exchange rate will

boost exporter income and make imports more expensive

A contractionary policy is disinflationary. Examples of contractionary policies would be

increased interest rates, increased taxes

An increase in bank interest rates will

increase borrowing costs for consumers

A depreciation of the New Zealand dollar will have the effect of

making export returns increase in NZ dollar terms

Price stability is important in an economy because it

keeps export prices competitive overseas, encourages people to save

A depreciation of the NZ exchange rate will

increase AD as net exports increase, decrease AS as import costs rise

Overall, an increase in interest rates will

slow the economy down and be contractionary

A decrease in interest rates will

increase business borrowing costs

A decrease in interest rates would

reduce overseas investor demand for NZ dollars=depreciation

Any policy that increases aggregate supply will

improve price stability and economic growth

An economy experiencing disinflation has

lower levels of inflation than the previous year

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Monetary policy

19 termsStudBud Administration359 plays

On price stability, inflation and New Zealand monetary policy

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Questions 19

Answers

1
A depreciation of the NZ exchange rate will
improve export returns and make imports cheaper
decrease interest rates
reduce exporter income and make imports less expensive
boost exporter income and make imports more expensive
2
A contractionary policy is disinflationary. Examples of contractionary policies would be
increased interest rates, increased taxes
supply side policies to raise productivity
increased government spending, raising benefits
decreased interest rates, decreased taxes
3
Improved national productivity will
increase AD
increase AS
decrease AS
decrease AD
4
An increase in bank interest rates will
increase borrowing costs for consumers
increase dividends for consumers
decrease savings for consumers
decrease borrowing costs for consumers
5
A depreciation of the New Zealand dollar will have the effect of
making export returns decrease in NZ dollar terms
making export returns increase in NZ dollar terms
making net exports fall
making imports less expensive
6
The effect of any policy that reduces Aggregate Demand will be to
increase inflationary pressures
reduce inflationary pressures
decrease exports and imports
increase economic growth
7
Price stability is important in an economy because it
keeps export prices competitive overseas
encourages people to save
encourages people to borrow
encourages people to spend
8
A depreciation of the NZ exchange rate will
increase AD as net exports increase
increase AS as import costs rise
decrease AD as net export increase
decrease AS as import costs rise
9
Overall, an increase in interest rates will
boost the economy and be contractionary
slow the economy down and be contractionary
slow the economy down and be expansionary
boost the economy and be expansionary
10
A decrease in interest rates will
increase business borrowing costs
increase the exchange rate
decrease business borrowing costs
decrease business investment
11
A decrease in interest rates would
boost export sales and import payments
reduce net exports
reduce overseas investor demand for NZ dollars=appreciation
reduce overseas investor demand for NZ dollars=depreciation
12
Any policy that increases aggregate supply will
improve price stability and harm economic growth
improve price stability and economic growth
harm price stability and economic growth
harm price stability and boost economic growth
13
An increase in interest rates would
decrease X and X
decrease C and I
increase G and X
increase C and I
14
An economy experiencing disinflation has
higher levels of inflation than the previous year
the general price level increasing
lower levels of inflation than the previous year
falling general levels of prices
15
O.C.R. stands for
Official Credit Rating
Overseas Crime Rate
Official Crime Rate
Official Cash Rate
16
An increase in the Official Cash Rate will
Increase the exchange rate
Decrease interest rates
Increase interest rates
Decrease aggregate supply
17
The organisation responsible for monetary policy and issuing notes and coins in New Zealand is
Bank of New Zealand
Ministry of Finance
Reserve Bank of New Zealand
Treasury
18
A contractionary government policy is one that
increases AD
increases AS
decreases AD
decreases AS
19
The target range for New Zealand inflation is
No inflation
1-3 % inflation
3% inflation
0 to 3% inflation

Monetary policy Flashcards | StudBud