If the federal reserve conducts open market sales the

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52) If the Federal Reserve conducts open market sales, the money supply _____, shifting the LM curve to the _____. (a) decreases; right (b) decreases; left (c) increases; right (d) increases; left Answer: B Question Status: Previous Edition 53) If the Federal Reserve conducts open market _____, the money supply _____, shifting the LM curve to the right. 54) If the Federal Reserve conducts open market _____, the money supply _____, shifting the LM curve to the left. 55) An increase in the quantity of money supplied shifts the money supply curve to the _____, and the equilibrium interest rate _____. 56) A decrease in the quantity of money supplied shifts the money supply curve to the _____, and the equilibrium interest rate _____. (a) right; falls (b) right; rises (c) left; falls (d) left; rises Answer: D Question Status: Previous Edition
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872 Frederic S. Mishkin • Economics of Money, Banking, and Financial Markets, Seventh Edition 57) An increase in the quantity of money supplied shifts the money supply curve to the _____ and the LM curve to the _____. 58) A decrease in the quantity of money supplied shifts the money supply curve to the _____, and the LM curve to the _____. 59) A decline in the money _____ shifts the LM curve to the _____, causing the interest rate to rise and output to fall. 60) A decline in the money supply shifts the LM curve to the left, causing the interest rate to _____ and output to _____. (a) rise; rise (b) rise; fall (c) fall; rise (d) fall; fall Answer: B Question Status: Previous Edition 61) An increase in the money _____ shifts the LM curve to the _____, causing the interest rate to fall and output to rise. Chapter 24 Monetary and Fiscal Policy in the ISLM Model 873 62) An increase in the money supply shifts the LM curve to the right, causing the interest rate to _____ and output to _____.
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