With the value of money on the vertical axis, the money supply curve is
a. upward sloping because people supply a larger quantity of money when the value of money increases.
b. downward sloping because people supply a larger quantity of money when the value of money decreases.
c. horizontal because we assume the central bank controls the money supply
d. vertical because we assume the central bank controls the money supply.
d
You might also like to view...
Which of the following is NOT an expected benefit of reducing nontariff barriers to trade?
A) Fewer firms to compete with B) Lower prices for many goods C) Increase in the volume of exports and imports D) Increase in production levels E) Improved overall economic welfare
Pressure to redistribute the economic pie is strong when the economy is booming
Indicate whether the statement is true or false
A public transit company finds that when it reduces the price of a bus ticket, total revenues remain the same. One can conclude from this that:
a. the demand curve is horizontal, reflecting infinite price elasticity. b. the company sells the same number of bus tickets both before and after the price change. c. the demand curve for bus tickets must have shifted to the right. d. the firm is operating in a range of the demand curve that is unit elastic. e. the price should be lowered further so that a larger quantity can be sold.
Bank lending and deposits tend to change as interest rates change. Can the Fed counteract this tendency?
a. Yes, through its ability to affect the money supply. b. Yes, through its ability to change tax levels. c. No, the Fed is forbidden by the Constitution from intervening in the economy. d. No, the Fed almost always follows a passive monetary policy.