Exam 15: Monetary Theory and Policy

The figure given below shows equilibrium in a money market. Which of the following will be observed if the money supply curve shifts from S to S' while the rate of interest remains at "r"?

The behavior of the M1 velocity of money in recent years can be explained by:

When the short-run aggregate supply curve is steep, then for a given increase in aggregate demand:

Other things constant, an increase in the price level will:

An increase in the money supply leads to a(n):

Which of the following would cause an increase in the velocity of money?

When the Fed is targeting the money supply, it has complete control over the interest rate.

If the money supply is $1,000, the price level is 3, and real income (or output) is $5,000, then the velocity of money is _____.

Which of these changes is likely to follow when the Fed purchases U.S. government securities?

The velocity of money is defined as:

The figure given below shows the interest rate on the vertical axis and the quantity of money on the horizontal axis. In this figure, an increase in the interest rate will cause a movement from:

The ultimate effect of a reduction in the money supply is:

If the Fed increases the money supply, then:

An increase in investment can lead to a greater increase in aggregate demand if the value of the spending multiplier is:

In the aggregate demand-aggregate supply model in the short run, an increase in the money supply will lead to a(n):

When people exchange money for financial assets, the _____ rises.

Which of the following monetary policies would be appropriate to close a recessionary gap?

Which of these is a flow variable?

According to the equation of exchange, if real GDP is $2 trillion and the money supply is $0.5 trillion, the velocity of money:

The Fed purchases of long-term assets to stabilize financial markets, reduce long-term interest rates, and improve the investment environment are called: