Answered: In the long-run, money market…

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter21: The Monetary System

Section: Chapter Questions

Problem 12PA

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Question

In the long-run, money market equilibrium determines

the value of money.

the nominal interest rate.

velocity.

real GDP.

the real interest rate.

Which of the following is a tool the Federal Reserve System can use to regulate the quantity of money?

i.	changing the discount rate

ii.	conducting open market operations

iii.	changing the required reserve ratio

i only

ii only

ii and iii

i and ii

i, ii, and iii

Definition Video Formula Definition Phenomenon in which market supply and demand balance each other. Market equilibrium is the economic state in which the market demand curve intersects the market supply curve, giving us the equilibrium price and equilibrium quantity for which a commodity can be sold and purchased in an economy. When market equilibrium is achieved, it suggests that all resources have been allocated efficiently and that there is just a distribution of income and resources in the economy. Video Formula

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