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Question
If the Fed injects reserves into the banking system and they are held as excess reserves, then the monetary base ________ and the money supply ________.a. remains unchanged; remains unchanged
b. remains unchanged; increases
c. increases; increases
d. increases; remains unchanged
Answer
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Related questions
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The organization responsible for the conduct of monetary policy in the United States is the
A. Comptroller of the Currency.
B. U.S. Treasury.
C. Federal Reserve System.
D. Bureau of Monetary Affairs.
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A. balanced budgets.
B. rapidly growing money supplies.
C. falling money supplies.
D. constant money supplies.
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A. exchanges.
B. banks.
C. over-the-counter markets.
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Banks, savings and loan associations, mutual savings banks, and credit unions
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Which of the followings does NOT describe the goods market in the ISLM model?
A. consumption function
B. investment function
C. government spending and tax
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As bonds become a riskier asset, the demand for money ________ and, all else constant, the equilibrium interest rate ________.
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Q:
An autonomous increase in money demand, other things equal, shifts the ________ curve to the ________.
A. IS; right
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In the long-run ISLM model and with everything else held constant, as long as the level of output ________ the natural rate level, the price level will continue to ________, shifting the LM curve to the ________, until finally output is back at the natural rate level.
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A. demand; right
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Q:
A policy in which the money supply is kept growing at a constant rate regardless of the state of the economy is
A. a Taylor rule.
B. a discretionary policy.
C. a policy rule advocated by monetarists.
D. advocated by activists.
Q:
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B. the Lucas critique.
C. public choice theory.
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Q:
The Lucas critique indicates that
A. advocates of discretionary policies' criticisms of rational expectations models are well-founded.
B. advocates of discretionary policies' criticisms of rational expectations models are not well-founded.
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Q:
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C. output will be lower.
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Q:
If the economy suffers a permanent negative supply shock because there is an increase in regulations that permanently reduce the level of potential output, then
A. potential output falls.
B. the long-run aggregate supply curve shifts leftward.
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Q:
With the policy rate set at zero, the rise in expected inflation will lead to a ________ in the real interest
rate, which will cause investment spending and aggregate output to ________.
A. fall; rise
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B. Instead of relying solely on the economy's self-correcting mechanism, much more aggressive fiscal expansions than those of the U.S. (in addition to a substantial monetary easing) served to shift the AD curve back to general equilibrium relatively quickly.
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Q:
Explain and demonstrate graphically the effects of a negative supply shock in both the short-run and long-run.
Q:
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A. increase; increase
B. increase; decrease
C. decrease; increase
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Q:
________ in the foreign interest rate causes the demand for domestic assets to shift to the right and the domestic currency to ________, everything else held constant.
A. An increase; appreciate
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D. A decrease; depreciate
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A. right; appreciate
B. right; depreciate
C. left; appreciate
D. left; depreciate