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Economics: A Contemporary Introduction 11th Edition

Economics: A Contemporary Introduction (11th Edition)

Book Edition11th Edition
Author(s)McEachern
ISBN9781305505469
PublisherCengage Learning
SubjectEconomics
Section 29-1: The Demand and Supply of Money
CHECK POINT
Section 29-2: Money and Aggregate Demand in the Short Run
CHECK POINT
Section 29-3: Money and Aggregate Demand in the Long Run
CHECK POINT
Section 29-4: Targets for Monetary Policy
CHECK POINT
Chapter 29, End of Chapter, Problems and Exercises, Exercise 13
Page 681

Would each of the following increase, decrease, or have no impact on the ability of open-market operations to affect aggregate demand? Explain your answer.
a. Investment demand becomes less sensitive to changes in the interest rate.

Would each of the following increase, decrease, or have no impact on the ability of open-market operations to affect aggregate demand? Explain your answer.
b. The marginal propensity to consume rises.

Would each of the following increase, decrease, or have no impact on the ability of open-market operations to affect aggregate demand? Explain your answer.
c. The money multiplier rises.

Would each of the following increase, decrease, or have no impact on the ability of open-market operations to affect aggregate demand? Explain your answer.
d. Banks decide to hold additional excess reserves.

Would each of the following increase, decrease, or have no impact on the ability of open-market operations to affect aggregate demand? Explain your answer.
e. The demand for money becomes more sensitive to changes in the interest rate.

Page 681