Answer the following statement(s) true (T) or false (F)

Question

1.Money market equilibrium occurs at that real interest rate where the quantity of money demanded equals the quantity of money supplied.
2.In the long run, if the money supply rises by 20 percent, the price level rises by 20 percent.
3.During an economic recession, the Fed will engage in a contractionary monetary policy.
4.By implementing a contractionary monetary policy, the Fed decreases the money supply and increases interest rates.
5.If the economy is at full employment, an increase in money supply will create a new equilibrium that cannot be sustained.

Answer 1

1.false
2.true
3.false
4.true
5.true