9. The money demand curve is vertical because the Fed determines how much money
ID: 1238420 • Letter: 9
Question
9.The money demand curve is vertical because the Fed determines how much money is circulating in the economy.
A) True
B) False
10.
A rise in the interest rate causes the money demand curve to shift leftward.
A) True
B) False
11.
When there is an excess supply of money in the economy, there is also an excess supply of bonds.
A) True
B) False
12.
When bond prices rise, the interest rate falls.
A) True
B) False
13.
If the Fed keeps the money supply unchanged, a decrease in government purchases causes the interest rate to drop.
A) True
B) False
14.
Equilibrium in the money market occurs when the total quantity of money people are actually holding is equal to the total quantity of money that people want to hold.
A) True
B) False
15.
f the Fed sells government bonds, the interest rate will fall.
A) True
B) False
16.
When we include the effects of the money market, an increase in government purchases causes real GDP to rise by even more than when we ignore the money market.
A) True
B) False
17.
The money supply curve is vertical, because the Fed sets the money supply at whatever level it wants to.
A) True
B) False
18.
When we add the money market to the short-run macro model, fiscal policy becomes less effective in changing GDP.
A) True
B) False
Explanation / Answer
Not one of you is 100% correct.. Thanks for that BTW!!! I am not concerned with points, votes, or whatever you call it.
9 f
10 f
11 f
12 t
13 t
14 t
15 f
16 f
17 t
18 t
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