Consider the money market drawn with the value of money on the vertical axis. If money demand is unchanged and the price level rises, then
a. the money supply must have increased, perhaps because the Fed bought bonds.
b. the money supply must have increased, perhaps because the Fed sold bonds.
c. the money supply must have decreased, perhaps because the Fed bought bonds.
d. the money supply must have decreased, perhaps because the Fed sold bonds.
a
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Alpha Corp . and Beta Corp . are the only firms in an industry. It is found that Alpha loses its entire market share to Beta when Beta lowers its price. What is the optimum pricing strategy for Alpha?
What will be an ideal response?
A schedule of amounts of a good that people will purchase at various prices during a specific time period holding other factors constant is
A) a market. B) supply. C) demand. D) the market clearing price.
How do balance of trade, balance on current account, and balance of payments differ?
What will be an ideal response?
The effectiveness of automatic stabilizers is limited by the fact that
A. Congress usually acts slowly in legislating changes in tax rates. B. The stabilizers tend to raise the average price level regardless of the phase of the business cycle. C. The offset that the stabilizers provide to a change in private spending is less than the change in private spending. D. Transfer payments and subsidies increase during inflation and decrease during recessions.