The money demand curve shifts in when Group of answer choices the Fed sells bonds. income decreases. the interest rate increases. the price level goes up.
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- To decrease the money supply, the Fed can: a) decrease the RRR b) conduct open market purchases c) increase the discount rateWhen the Fed increases the money supply, we expect a. interest rates and stock prices to rise. b. interest rates to fall and stock prices to rise. c. interest rates to rise and stock prices to fall. d. interest rates and stock prices to fall.When the Fed sells bonds, the money supply A) selling bonds does not have any effect on the money supply. B) contracts. C) expands. D) sometimes rises and sometimes falls.
- If the money multiplier is 5 and the Fed sells $1 million worth of bonds, what happens to the money supply? Group of answer choices It decreases by $10 million. It increases by $10 million. It decreases by $5 million. It increases by $5 million.f the Fed wants to raise interest rates, then it can use its open market operations to: Group of answer choices decrease the money supply. increase the money supply. increase money demand. decrease money demand.Holding money demand constant, if the Fed pursues loosemoney and increase money supply, which will decrease? a. Real interest rate b. Price level c. Velocity of money d. Seasonal employment
- True, False, or Uncertain A central bank that increases the money supply in its economy has more effect on spending the moreinterest rate responsive (elastic) is the money demand curve.What happens when the Fed begins to taper purchases? (a) The supply of bonds increases, price rises and interest rates rise (b)Demand for bonds decreases, prices fall, and interest rates rise (c) The supply of bonds decreased, prices fall, and interest rates riseWhen the Fed sells government securities (bonds), the money supply will ______ . a. first increase and then decrease b. first decrease and then increase c. increase d. decrease
- if the fed raise the reserve requirment on deposit from 15% to 20%, what would happen to the money supply? a. it would increase b. it would remain unchanged c, it depends on the value of interest rates d, it would decreaseWhen the Fed sells government securities, ceteris paribus, the money supply shifts to the ________ and the equilibrium interest rate ________. Group of answer choices right; rises right; falls left; rises left; fallsWhen the Fed wants to expand the money supply, it a. sells government securities. b. buys government securities. c. buys common stock. d. sells common stock.