Exam 21: The Monetary Policy and Aggregate Demand Curves

Everything else held constant,an autonomous easing of monetary policy will cause

Everything else held constant,a decrease in net taxes will cause the IS curve to shift to the ________ and aggregate demand will ________.

Everything else held constant,an increase in autonomous planned investment spending will cause the IS curve to shift to the ________ and aggregate demand will ________.

Everything else held constant,an increase in government spending will cause

Based on the Taylor Principle,a central bank's endogenous response of raising interest rates when inflation rises

Because prices are sticky in the short-run,when the Federal Reserve raises the federal funds rate

Inflationary pressures caused the FOMC to increase the federal funds rate by ¼ of a percentage point in June 2004,and by exactly the same amount at every subsequent FOMC meeting through June of 2006. Theses actions

The upward slope of the MP curve indicates that

Everything else held constant,a decrease in government spending will cause the IS curve to shift to the ________ and aggregate demand will ________.