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.ill AT&T; 9:54 PM @ 50% iD. + ccsu.blackboard.com QUESTION 12 1 points Save Answer In the market for money: the money demand curve is completely horizontal because the interest rate is not determined by the demand for O B. the money supply curve is vertical because it depends entirely on the decision of the central bank. C. the demand curve is upward sloping because at higher interest rates people will want to hold more cash due to its OD the money supply curve is upward sloping because as the interest rate increases banks will make more loans. QUESTION 131 points Save Answer Which of the statements below correctly describes how monetary policy works to get the economy out of an inflationary gap. OA The Fed decreases the money supply in order to increase interest rates which would decrease AD by reducing C and I OB.The Fed decreases the money supply in order to decrease interest rates which would decrease AD by reducing C and ° C. The Fed increases the money supply in order to increase interest rates which would decrease AD by reducing C andI. OD. The Fed increases the money supply in order to increase decrease rates which would decrease AD by reducing C and Click Save and Submit to save and submit. Click Save All Answers to save all answers Save All Answers Save and SubmitExplanation / Answer
12. B) the money supply curve is vertical because it depends entirely on the decision of the central bank.
MS is vertical and MD is downward sloping under money market.
13. A) The Fed decreases the money supply in order to increase interest rate which would decrease AD by reducing C and I.
When Fed decreases money supply then interest rate increases which makes costly for people to borrow money so investment decreases.
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