Understanding Monetary Policy and Money Demand
Classified in Economy
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Which of the following is a flow variable? income
We would expect which of the following to occur when the central bank pursues
contractionary monetary policy? a reduction in bond prices and an increase in i.
Based on our understanding of the determinants of the interest rate and bond
prices, we know that a reduction in income will cause: an increase in bond prices
and a reduction in i.
Which of the following is a component of money?
NOT
bonds,savings,income,stocks NONE OF THE ABOVE
Which of the following is a component of money?
coins held by the nonbank public,
bills held by banks, checkable deposits ALL OF THE ABOVE
The money demand curve will shift to the right when which of the following occurs?
an increase in income
The money demand curve will shift to the left when which of the following occurs?
a reduction in the interest rate, an increase in the interest rate, an open market sale
of bonds by the central bank, an increase in income NONE OF THE ABOVE
The interest rate will increase as a result of which of the following events?
an increase in income
Which of the following generally occurs when a central bank pursues expansionary
monetary policy? the central bank purchases bonds and the interest rate
decreases.
Which of the following generally occurs when a central bank pursues contractionary
monetary policy? the central bank sells bonds and the interest rate increases.
We would expect which of the following to occur when the central bank pursues
expansionary monetary policy?an increase in bond prices and a reduction in i