If the Fed engages in an open-market purchase of bonds and simultaneously raises the reserve requirement ratio for commercial banks, what can we conclude about the money supply? It will remain unchanged We cannot be certain what will happen to money supply without further details It will definitely increase It will definitely decrease

We cannot be certain what will happen to money supply without further details

To decrease the money supply, the Federal Reserve can take which of the following actions? Buy government bonds or decrease the reserve ratio Lower the discount rate Increase government spending Sell government bonds or increase the reserve ratio

Sell government bonds or increase the reserve ratio

Which of the following best illustrates the 'store of value' function of money? You use money to buy groceries You exchange money for foreign currency You use money to pay off a loan You hold currency in a piggy bank that you don't intend to spend right away but at a future date

You hold currency in a piggy bank that you don't intend to spend right away but at a future date

If the economy were encountering a recession, which of the following monetary policies would be appropriate? Selling government securities, increasing the reserve ratio, increasing the discount rate Buying government securities, reducing the reserve ratio, reducing the discount rate Decreasing taxes and increasing government spending Increasing taxes and reducing government spending

Buying government securities, reducing the reserve ratio, reducing the discount rate

What results in a change in demand for funds, represented by a shift of the curve? Change in Inflation Rate Change in Ceteris Paribus Variable Change in Exchange Rate Change in Interest Rate

Change in Ceteris Paribus Variable

Which of the following would shift the Aggregate Demand (AD) curve to the left? A decrease in interest rates An increase in consumer confidence A decrease in government spending An increase in personal income tax rates

An increase in personal income tax rates

The Aggregate Demand (AD) curve is impacted by which of the following effects? Supply effect, demand effect, and equilibrium effect Inflation effect, deflation effect, and stagflation effect Substitution effect, income effect, and price effect Interest rate effect, real-balance effect, and foreign purchase effects

Interest rate effect, real-balance effect, and foreign purchase effects

An increase in investment spending caused by a decline in the interest rate will: Shift the AS curve to the left Shift the AD curve to the right Shift the AS curve to the right Shift the AD curve to the left

Shift the AD curve to the right

The Aggregate Supply (AS) curve shows the various amounts of real GDP which businesses will produce at each price level. This concept is best described as: The relationship between interest rates and investment The relationship between government spending and taxation The relationship between inflation and unemployment The relationship between price level and output

The relationship between price level and output

An improvement in productivity will: Shift the AS curve to the left Shift the AD curve to the left Shift the AS curve to the right Shift the AD curve to the right

Shift the AS curve to the right

What curve shows a direct relationship between the actual price level and real GDP supplied in the short run? Long-run aggregate supply (LRAS) curve Aggregate demand curve Phillips curve Short-run aggregate supply (SRAS) curve

Short-run aggregate supply (SRAS) curve

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