4/12 175x + $03 Chapter 15 Monetary Policy: Pre-Class & ln-Class Activities Packet NamellD. Number: Section: Date: Part 3. Discussion Questions and Problems 1. Why is the demand curve for money downward sloping? 2 . Explain how the Keynesian transmission mechanism works. \\ ~'___________ 3. Explain how the monetarist transmission mechanism works. K 4. Argue the case for and against a monetary rule. E 5. How does ination targeting work? 6. According to market monetarists, what problems might arise from a sharp decline in Nominal GDP? _________ 7. What are the differences between Activist and Non-Activist (Rule-Based) monetary policy? 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: \\m \"KR 9. The Taylor rule is a considered to be a middle ground between Activist and Non-Activists. Specify this rule: a 10. What IS LIQUIdIty Trap? a