6. Aninthemoneysupplymakes it easier for banks to borrowfromthegovernmentandforindividuals and companies to borrowfrom banks.policy determines whetherof growth in asupply7.theratecountry'smoneyisgreaterthantherate of growth in output.8.theory predicts that exchangebyratesaredeterminedrelativeprices, and that changes in relativeprices willexchange rates.resultinachange in

Answered: 6. An in the money supply makes it…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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6. An
in
the
money
supply
makes it easier for banks to borrow
from
the
government
and
for
individuals and companies to borrow
from banks.
policy determines whether
of growth in a
supply
7.
the
rate
country's
money
is
greater
than
the
rate of growth in output.
8.
theory predicts that exchange
by
rates
are
determined
relative
prices, and that changes in relative
prices will
exchange rates.
result
in
a
change in

Expert Solution

Step 1: 6

The increase in the money supply will increase the consumer spending, shifting aggregate demand in the economy. People in the economy generate more income and do more saving which gets turn into investment really quick. Thus during this time it becomes easier for banks to borrow from government and for individuals and companies to borrow from banks. Interest rate are low.

The blank can be filled with increase.

Step 2: 7

Monetary policy is the demand side short run economic policy used by the government generally by a central bank to control inflation in the economy to maintain stable economic growth.

The blank can be filled with Monetary policy.

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