Which of the following increases money demand?
A) Disruptions in the banking system.
B) The introduction of online banking.
C) The wider availability of ATMs.
D) The introduction of deposit insurance.
A
You might also like to view...
In Figure 3-3 above, when income is 700, unplanned inventory investment is
A) -180. B) 180. C) 300. D) -300. E) -120.
Suppose that the Fed announces a low-money-growth policy to control inflation and workers sign low-wage contracts as a result. If instead, the Fed had implemented a high-money-growth policy, which of the following would not occur?
a. The unemployment rate would increase. b. The Fed's stated policy would be time inconsistent. c. The unemployment rate would be less than the natural rate. d. The Fed would not achieve credibility through its actions. e. The rate of inflation would be higher than expected.
Figure 16-3
Figure 16-3 shows the impact of deficit spending and the corresponding economic expansion on the demand curve for money. If the Federal Reserve does not want interest rates to rise, it will
a.
shift the money supply curve to the right by monetizing the deficit.
b.
shift the money supply curve to the left by open market sales of government securities.
c.
maintain the current targets for both M1 and M2 money stocks.
d.
engage in contractionary monetary policy, such as increases in the discount rate.
Which of the following statements is NOT correct about monopoly?
A. A monopolist generally faces a downward-sloping demand curve. B. There is no close substitute for a monopoly's product. C. A monopoly may make negative profits in the short run. D. Monopolists always make positive profits in the long run.