7.The monetary transmission mechanism works through the effects of changes in the money supply on:A)the budget deficit.B)investment.C)government expenditures.D)taxation.
8.According to the IS-LMmodel, if Congress raises taxes but the Fed wants to hold income constant, then the Fed must ______ the money supply.
9.If taxes are raised, but the Fed prevents income from falling by raising the money supply, then:
10.An increase in consumer saving for any given level of income will shift the:
11.An increase in the demand for money, at any given income level and level of interest rates, will, within the IS-LMframework, ______ output and ______ interest rates.A)increase; lowerB)increase; raiseC)lower; lower.D)lower; raise
12.In the IS-LMmodel, a decrease in the interest rate would be the result of a(n):