Quiz 7 Macro

Buy bonds in the open market.

If the demand for money increases and the Fed wants interest rates to remain unchanged, which of the following would be appropriate policy?

monetarism.

The view that changes in the money supply is the primary cause of change in real output and the price level is most closely associated with

stickiness and shocks to either aggregate demand or aggregate supply.

From the mainstream perspective, instability in the economy is due to price

$2.25

If an American can purchase 40,000 British pounds for $90,000, the dollar rate of exchange for the pound is

reducing the discount rate.

The Federal Reserve can increase aggregate demand by

downsloping because, at lower dollar prices for euros, Americans will want to buy more European goods and services.

The U.S. demand for euros is

inflation rate.

When the Federal Reserve acts to tighten money and credit in the economy, it is trying to reduce the

technology and resources affect productivity, and thus the long-run growth of aggregate supply.

Real-business-cycle theory suggests that changes in