An increase in the money supply
a. reduces interest rates and shifts aggregate demand to the right.
b. reduces interest rates and shifts aggregate supply to the right
c. raises interest rates and shifts aggregate demand to the right.
d. raises interest rates and shifts aggregate supply to the right.
a
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The one main difficulty with a nominal GDP target rule for monetary policy is that it
A) is a difficult target to hit. B) provides no nominal anchor. C) requires a painful extinguishing response to an adverse supply shock. D) performs badly when there is unstable velocity.
Which one of the following persons would be considered unemployed?
a. A person not working who has given up searching for a job. b. A part-time worker looking for a full-time job. c. A construction worker who was laid off due to cold weather. d. A full-time college student who is not a member of the labor force.
If a particular perfectly competitive industry uses only a small fraction of the supply of any of its inputs, the long run supply curve for that industry will tend to be: a. vertical
b. upward sloping. c. horizontal. d. downward sloping.
The persistent budget deficits of recent decades are
A) an expected result, because politicians have an incentive to levy taxes rather than spend on current programs. B) surprising, because politicians have a strong incentive to balance the government's budget. C) an expected result, because politicians have an incentive to spend on current programs financed by borrowing. D) surprising, because politicians have a strong incentive to run budget surpluses and thereby indicate that their actions have generated a profit.