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If the economy is facing inflationary pressures, the Feds will:raise interest ratesa higher interest rate ____ consumption, investment, and _____ , which ___ aggregate demand.decrease, exports, decreasesthe twin goals of monetary policy are:economic growth with low unemployment and stable prices with moderate long term interest rates.the fed uses its tools to counteract:
booms and recessionsloosening monetary policy causes interest rates to __ and consumption and investment to ___fall, increasewhen current real output exceeds potential real output, the feds will __ interest rates in an effort to fight ___.increase, inflation.In the classiscal monetary transmission mechanism any change in ___ will bring about ___M, a direct proportionate change in P.
the quantity theory equation of exchange states:MV=PQMoney Illusion:is the misperception that one is wealthier, it occurs when the money supply grows.