According to the interest-rate-based perspective on the monetary policy transmission mechanism
A. changes in the money supply have little influence on macroeconomic variables.
B. key channels of monetary policy indirectly ultimately relate money supply changes to total planned spending through indirect effects on planned investment.
C. inflation is always caused by excessive monetary growth and changes in the money supply offset aggregate demand only directly.
D. monetary policy leads to increases in the price level but will have no effect on the rate of output.
Answer: B
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In which of the following cases would the supply of loanable funds curve shift rightward?
A) Investment demand increases. B) The stock market booms, so people's wealth increases. C) In June, Sally learns that at year's end she will receive a bonus that will double her current salary. D) The economy moves into a recession. E) Joe is worried about cutbacks at his firm, so his expected future income falls.
Firms will only adopt more automated methods of production when
a. they reduce the need for workers. b. they lower production costs. c. they lengthen the production process. d. other firms in the industry are doing it.
A negative externality
a. is a cost to a bystander. b. is a cost to the buyer. c. is a cost to the seller. d. exists with all market transactions.
Open-market operation means buying and selling of ________ by the ________ in an effort to influence money supply
a. equity shares; president b. government securities; Fed c. mutual fund; government d. commodities; public