Exam 15: Monetary Theory and Policy.

Exhibit 15.1 -Exhibit 15.1 shows the interest rate on the vertical axis and the quantity of money on the horizontal axis. An increase in the interest rate will cause a movement from _____

Suppose that the demand and supply of money are initially in equilibrium, and that the demand for money increases. A monetary authority interested in keeping the money supply constant and the interest rate low must _____

For a given increase in aggregate demand, the steeper the short-run aggregate supply curve, _____

In the summer of 1999, the FOMC became concerned that ____

Which of the following is not a way the Fed has tried to soothe troubled world markets?

One of the risks of quantitative easing is that the Fed could lose money on its purchases when the assets are sold back for less.

Which of the following variables are assumed to be more or less constant in the quantity theory of money equation?

Between 2007 and 2017, the drop in velocity meant that the _____

The Fed uses the federal funds rate to pursue its twin goals of _____

When the Fed decreases the money supply, _____

If real output and velocity are stable and predictable, then the equation of exchange can be used to derive a simple relationship between _____

Exhibit 15.3 -Exhibit 15.3 shows equilibrium in a money market. What happens if the money supply curve shifts from S to S'_m while the rate of interest remains at i?

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

If the velocity of money is 2 and money supply is $200 trillion, then nominal GDP is _____

Exhibit 15.5 -Exhibit 15.5 depicts the aggregate demand curve and the short-run aggregate supply curve of an economy. In this figure, short-run equilibrium occurs at _____

Which of the following is an example of an expansionary monetary policy?

According to the quantity theory of money, if velocity of money is constant, a 5 percent increase in money supply will lead to a 0.25 percent increase in nominal GDP.

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

Between 2007 and 2017, the CPI increased an average of just _____ per year.

If the money supply in an economy equals $100 trillion and nominal GDP equals $200 trillion, then according to the equation of exchange, the velocity of money _____