Does monetary policy require the accompaniment of fiscal policy to change total spending?
A) No, because the Fed is an independent agency of the federal government.
B) Yes, because monetary policy can contract total spending but cannot by itself expand it.
C) Yes, because no policy is effective if it only changes nominal money values.
D) Yes, if the demand for money tends to change in about the same direction and amount whenever the supply changes.
D
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The circular flow of income shows that
A) households transact only in the goods market. B) governments purchase goods and services. C) firms generally are the demanders in the goods markets and suppliers in the factor markets. D) None of the above answers is correct.
The derived demand for borrowed funds has the characteristic negative slope of any demand curve
a. True b. False Indicate whether the statement is true or false
We cannot predict the effect on the equilibrium quantity, but know that the market clearing price will decrease when
A. supply decreases and at the same time demand increases. B. supply increases and at the same time demand decreases. C. supply decreases and demand decreases. D. supply increases and demand increases.
As interest rates rise, the opportunity cost of holding money ________ and the demand for money ________
A) rises; rises B) rises; falls C) falls; rises D) falls; falls