Exam 22: The Monetary Policy and Aggregate Demand Curves

An increase in spending that results from expansionary ________ policy causes the interest rate to ________, everything else held constant.

If the monetary policy rule is given by r = 1.0 + 0.5p, then 1.0 represents ________.

In the 1970s , the inflation rate in Canada reach levels over ________ percent.

A decline in the money ________ shifts the MP curve to the ________, causing the interest rate to rise and output to fall, everything else held constant.

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

If an economy experiences high interest rates and high unemployment, the ISLM framework predicts that ________ policy has been too ________.

If the Bank of Canada conducts open market purchases, the money supply ________, shifting the MP curve to the ________, everything else held constant.

Based on the Taylor Principle, a central bank's endogenous response of decreasing interest rates when inflation falls ________.

An increase in investment spending because companies become more optimistic about investment profitability causes the aggregate demand function to shift ________ and the equilibrium level of aggregate output to ________, everything else held constant.

An increase in the interest rate due to Taylor principle changes result in ________.

A decrease in investment spending because companies become more pessimistic about investment profitability causes the aggregate demand function to shift ________, the equilibrium level of aggregate output to fall, and the IS curve to shift to the ________, everything else held constant.

Everything else held constant, an appreciation of the domestic currency will cause the IS curve to shift to the ________ and aggregate demand will ________.

If the Bank of Canada conducts open market ________, the money supply ________, shifting the MP curve to the left, everything else held constant.

Other things equal, a decrease in autonomous consumption shifts the ________ curve to the ________.

A decrease in autonomous planned investment spending, other things equal, shifts the ________ curve to the ________.

An autonomous tightening of monetary policy ________.

An autonomous decrease in money demand, other things equal, shifts the ________ curve to the ________.

Because prices are slow to move in the short-run, when the Bank of Canada lowers the overnight rate, ________.

A decrease in investment spending because companies become more pessimistic about investment profitability causes the aggregate demand function to shift ________ and the equilibrium level of aggregate output to ________, everything else held constant.

An increase in government purchases causes the IS curve to shift ________ and the aggregate demand curve to shift ________.