Homework Answers
at the current intersection point of the aggregate demand which is downward sloping line and the aggregate supply curve which is a vertical line, output level is not likely to change if there is a shift in the aggregate demand up or down. However price level will definitely change. in this case money supply is increased by a small amount which means aggregate demand curve will shift up. Price level will increase but there will be no change in output level
GDP stays the same and price level increases.
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Consider the following graph. If the Federal Reserve increases the money supply by a small amount,...
Consider the following graph. If aggregate demand decreases by a small amount, what effect will this...
Consider the following graph. If aggregate demand decreases by a small amount, what effect will this have on GDP and the price level? (There is only one right answer, but you can mark more than one if you are unsure.) GDP increases and the price level decreases GDP stays the same and the price level decreases OGDP decreases and the price level stays the same. GDP increases and the price level increases GDP stays the same and the price level...
If the Federal Reserve increases the reserve requirement, what will happen to the Money Supply in...
If the Federal Reserve increases the reserve requirement, what will happen to the Money Supply in the banking system? a. Increase b. Decrease c. Remain the same
If the Federal reserve increases the supply of money: A. there will be an increase in...
If the Federal reserve increases the supply of money: A. there will be an increase in government spending. B. there will be a decrease in aggregate demand. C. there will be no effect on aggregate demand. D. there will be a decrease in interest rates. E. there will be an increase in interest rates.
12. When the Federal Reserve increases the money supply, at a given price level the amount...
12. When the Federal Reserve increases the money supply, at a given price level the amount of output demanded is and the aggregate demand curve shifts a. greater, inward b. greater, outward c. lower, inward d. lower, outward 13. Aggregate supply is the relationship between the quantity of goods and services supplied and the a. Money supply b. Unemployment rate c. Interest rate d. Price level If a short-run equilibrium occurs at a level of output above the natural level,...
When the Federal Reserve decreases the growth of the money supply, the income afect causes the...
When the Federal Reserve decreases the growth of the money supply, the income afect causes the interest rate to while the liquidity effect drives the interest rate Continuing on the same tran thought when the Fed decreases the growth rate of the money supply the price level ofect drives the interest rate while the expected inflation rate pushes the interest rate Suppose there is an increase in the growth rate of the money supply the liquidity effect is smaller than...
If the Federal Reserve increases the US money supply, what will this do to the value...
If the Federal Reserve increases the US money supply, what will this do to the value of the US dollar compared to the euro?
1.What could the Federal Reserve have done to fight the Great Depression? a.Increase the money supply...
1.What could the Federal Reserve have done to fight the Great Depression? a.Increase the money supply to reduce the interest rate. b.Increase the money supply to raise the interest rate. c.Decrease the money supply to reduce the interest rate. d.Decrease the money supply to raise the interest rate. 2. How could the government have used fiscal policy to fight the Great Depression? a.Reduce taxes, raise transfers, raise government purchases. b.Reduce taxes, reduce transfers, reduce government purchases. c.Raise taxes, reduce transfers,...
4. If nominal money demand doubles and the real money supply also does what happens to...
4. If nominal money demand doubles and the real money supply also does what happens to the price level ( ). The price level increases by a factor of four b. The price level doubles ). The price level is unchanged. d. The price level falls by one-half. IL Short-Answer O stiens (19 points) 5. (7 points) If the Federal Reserve sold government securities, then the money supply (increase decrease remain the same), the money he would _(increase decrease remain...
1. What occurs during a negative demand shock? Output increases and the price level decreases. Output...
1. What occurs during a negative demand shock? Output increases and the price level decreases. Output and price level decrease. Output and price level increase. Output decreases and the price level increases. 2. In the equation of exchange, the term P × Q is the same as: the money supply. nominal GDP. national income. real GDP. 3. Expansionary monetary policy shifts the _____ curve to the _____. AD; right SRAS; left SRAS; right AD; left 4. The Taylor rule suggests...
On March 15, 2017, Federal Reserve Chairman Janet L. Yellen announced the Federal Reserve was raising...
On March 15, 2017, Federal
Reserve Chairman Janet L. Yellen announced the Federal Reserve was
raising its benchmark rate (the federal funds rate) by a quarter of
a percentage point (to a range of 0.75-1.00 percent). This was the
third time the Fed has raised rates after the Great Recession.
Image result for fed will raise rates Consider the aggregate
demand-aggregate supply diagram below, which represents the
macroeconomy. Suppose the market is initially at an equilibrium at
point A. What...
Consider the following graph. If aggregate demand decreases by a small amount, what effect will this have on GDP and the price level? (There is only one right answer, but you can mark more than one if you are unsure.) GDP increases and the price level decreases GDP stays the same and the price level decreases OGDP decreases and the price level stays the same. GDP increases and the price level increases GDP stays the same and the price level...
12. When the Federal Reserve increases the money supply, at a given price level the amount of output demanded is and the aggregate demand curve shifts a. greater, inward b. greater, outward c. lower, inward d. lower, outward 13. Aggregate supply is the relationship between the quantity of goods and services supplied and the a. Money supply b. Unemployment rate c. Interest rate d. Price level If a short-run equilibrium occurs at a level of output above the natural level,...
When the Federal Reserve decreases the growth of the money supply, the income afect causes the interest rate to while the liquidity effect drives the interest rate Continuing on the same tran thought when the Fed decreases the growth rate of the money supply the price level ofect drives the interest rate while the expected inflation rate pushes the interest rate Suppose there is an increase in the growth rate of the money supply the liquidity effect is smaller than...
4. If nominal money demand doubles and the real money supply also does what happens to the price level ( ). The price level increases by a factor of four b. The price level doubles ). The price level is unchanged. d. The price level falls by one-half. IL Short-Answer O stiens (19 points) 5. (7 points) If the Federal Reserve sold government securities, then the money supply (increase decrease remain the same), the money he would _(increase decrease remain...
On March 15, 2017, Federal
Reserve Chairman Janet L. Yellen announced the Federal Reserve was
raising its benchmark rate (the federal funds rate) by a quarter of
a percentage point (to a range of 0.75-1.00 percent). This was the
third time the Fed has raised rates after the Great Recession.
Image result for fed will raise rates Consider the aggregate
demand-aggregate supply diagram below, which represents the
macroeconomy. Suppose the market is initially at an equilibrium at
point A. What...
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