If the Federal Reserve increases the money supply,the aggregate-demand curve shifts to the leftTrue/False

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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If the central bank increases the supply of money, a new equilibrium is reached by A rightward shift of the demand for money curve. A rightward movement down the demand for money curve. A leftward shift of the demand for money curve. A leftward movement up the demand for money curve.
Which of these assumptions does the Quantity Theory of Money depends on? Velocity of money is stable and GDP is at full employment. Real GDP depends upon the supply of resources and full employment is achieved. Real GDP depends upon the supply of resources and velocity of money is stable. There is government budget balance and trade balance in net exports.
The Quantity Theory of Money (QTM) states that ______. Note: the blank represents an entire phrase, not one word. (a) In the long run, an increase in the money supply will generate an equivalent increase in the velocity of money. (b) In the long run, an increase in the money supply will generate an equivalent increase in real GDP. (c) In the long run, an increase in the velocity of money will generate an equivalent increase in the price level. (d) In the long run, an increase in the money supply will generate an equivalent increase in the price level.
If the aggregate demand parameter decreases in the IS curve and the central bank wishes to stabilize output at potential, it should: a) lower the nominal interest rate. b) buy government bonds. c) expand the money supply. d) all of the above statements are correct.
From an initial long-run equilibrium, if aggregate demand grows more slowly than long-run and short-run aggregate supply, then the president and the Congress would most likely increase the required reserve ratio and decrease government spending. decrease government spending. decrease oil prices. decrease taxes. lower interest rates.
Which of the following statements are true based on these graphs? Check all that apply. The unemployment rate is currently 6% higher than the natural rate of unemployment. The natural level of output is $9 trillion. The current quantity of output is greater than potential output. Suppose the central bank of the economy increases the money supply. Show the long-run effects of this policy on both of the graphs by shifting the appropriate curves. The long-run effect of the central bank's policy is in real GDP. in the inflation rate, in the unemployment rate, and
how to calculate the equilibrium price.....
If the velocity of money increases but money supply stays the same, we would tend to see Group of answer choices A) a rightward shift in Aggregate Demand. B) a leftward shift in Aggregate Supply. C) a decrease in nominal GDP. D) deflation. E) a decrease in real GDP.
What will happen to the short run and long run prices when the Federal reserve decreases the requirement reserve ratio?
Which of the following statements best characterizes the Federal Reserve’s relationship to the US economy? A. The Federal Reserve cannot affect the economy in any predictable manner. B. The Federal Reserve can control the economy with precise accuracy. C. The Federal Reserve can indirectly affect output by influencing aggregate demand. D. The Federal Reserve is required by mandate to execute the demands of Congress and the President.
On the following graph, shift the curve or drag the blue point along the curve, or do both, to show the long-run effects of the increase in the money supply. 6 8 10 12 UNEMPLOYMENT RATE (Percent) In the long run, the increase in the money supply results in in the inflation rate and in the unemployment rate (relative to the economy's initial equilibrium). INFLATION RATE (Percent)
According to Keynes, which of the following information about the money market is wrong?A) The cost of giving up liquidity is interest.B) The money supply graph is steep.C) The equilibrium interest rate drops as a result of the expansive money supply.D) When the interest rate is above the equilibrium interest rate, a money supply surplus occurs in the economy.E) There is an inverse relationship between money demand and income.

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If the Federal Reserve increases the money supply, the aggregate-demand curve shifts to the left True/False