![]() Contractionary monetary policy directly pulls money out of the loanable funds market. Investment is a component of aggregate demand, so this shifts aggregate demand to the left. ![]() This lower the interest rate, which provides a larger incentive for firms to invest. Contractionary monetary policy directly puts money into the loanable funds market. This raises the interest rate, which provides a larger incentive for firms to invest Investment is a component of aggregate demand, so this shifts aggregate demand to the right d. Contractionary monetary policy directly puts money into the leanable funds market. This lowers the interest rate, which provides a larger incentive for firms to invest Investment is a component of aggregate demand, so this shifts aggregate demand to the right c. Which of the following best describes how contractionary monetary policy affects the aggregate demand curve in the aggregate demand aggregate supply model? a Contractionary monetary policy directly pulls money out of the loanable funds market This lower the interest rate, which provides a larger incentive for firms to invest Investment is a component of aggregate demand, so this shifts aggregate demand to the right. A firm that purchased inputs with a two-year contract 23. A worker whose wage increases with inflation e. A worker who signed a two-year wage contract d. A firm who hired a worker on a two-year wage contract c. Someone who borrowed money at a fixed interest rate b. stagflation would be hurt by unexpected inflation a. Injecting new money into the economy eventually causes a a recession d. portion of bank deposits that are set aside and not loaned out. property the bank underwrites as the loan source d currency deposited in a bank's accounts c. Bank reserves, by definition, are the a financial obligations the bank owes to others b. credit cards b Saving withdrawal slips c. Which innovation in the 1970s marked the beginning of the end for Mi as a reliable money supply measure? a checking deposits d. If a bank has a required reserve ratio of 25 percent and there is $10,000 in deposits, what is the maximum possible change to the money supply a $40.000 d. Excess reserves increase by $12,500 and required reserves increase by $7,500. Excess reserves increase by $20,000 and required reserves increase by S10,000 c. a short-term deposit at a bank If a bank that faces a 25 percent reserve ratio received a deposit of $30,000 and makes a loan to a customer for S10,000, what is the consequence if the bank then deposits the rest of the funds at the Federal Reserve? a. When money is acting as a unit of account, it allows someone to a. ![]() If a government increases spending by $100 billion, then one can expect output in the cconomy to increase by a. The y axis for the Laffer curve represents a. production of a greater quantity of output using the same or fewer inputs. production of a greater quantity of output using a greater quantity of inputs. A technological advancement allows for a. The assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is called a. e are government programs that automatically implement countercyclical fiscal policy in response to economic conditions 11. must be approved by Congress every time they are to be implemented c. are goverment programs that automatically implement countercyclical monetary policy in response to economic conditions b.
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