1)A possible SHORT-RUN of a one time only decrease in the money supply is a) a decrease in the natural unemployment rate b) an expansionary gap c) an increase in the natural unemployment rate d) an increase in the cyclical unemployment rate e) a decline in potential output   2 The growth rate of M*V is equal to the inflation rate plus the growth rate of output, Y (all as measured at instantaneous rates) True or false   3 To help remove an expansionary gap, the Federal Reserve can take actions that will result in an increase in the Federal Funds rate True or False   4 During the Christmas shopping season, the demand for money increase significantly

Subject:EconomicsPrice: Bought3

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1)A possible SHORT-RUN of a one time only decrease in the money supply is

a) a decrease in the natural unemployment rate

b) an expansionary gap

c) an increase in the natural unemployment rate

d) an increase in the cyclical unemployment rate

e) a decline in potential output

 

2 The growth rate of M*V is equal to the inflation rate plus the growth rate of output, Y (all as measured at instantaneous rates)

True or false

 

3 To help remove an expansionary gap, the Federal Reserve can take actions that will result in an increase in the Federal Funds rate

True or False

 

4 During the Christmas shopping season, the demand for money increase significantly. If the Fed desires to offset the increase in money demand to keep the nominal interest rate in the short run then it can

a) increase the discount rate

b) buy Treasury securities in the open market

c) increase the required reserve to deposit ratio

d) decrease the money supply

e) increase government spending on goods and services