the economics of money, banking, and financial markets

714 $

© 2014 Pearson Canada Inc.$

25. 
    

    If the Bank of Canada conducts open market ____, the money supply ____,
    shifting the MP curve to the right, everything else held constant.
    A) purchases; decreases
    B) sales; decreases
    C) purchases; increases
    D) sales; increases
    Answer: C
    Diff: 2 Type: MC Page Ref: 561
    Skill: Applied
    Objective List: 23.1 Apply the IS-MP framework for the determination of aggregate output and
    the interest rate

    
    


26. 
    

    If the Bank of Canada conducts open market ____, the money supply ____,
    shifting the MP curve to the left, everything else held constant.
    A) purchases; decreases
    B) sales; decreases
    C) purchases; increases
    D) sales; increases
    Answer: B
    Diff: 2 Type: MC Page Ref: 561
    Skill: Applied
    Objective List: 23.1 Apply the IS-MP framework for the determination of aggregate output and
    the interest rate

    
    


27. 
    

    A decline in the money ____ shifts the MP curve to the ____, causing the interest
    rate to rise and output to fall, everything else held constant.
    A) demand; right
    B) demand; left
    C) supply; right
    D) supply; left
    Answer: D
    Diff: 2 Type: MC Page Ref: 561
    Skill: Recall
    Objective List: 23.1 Apply the IS-MP framework for the determination of aggregate output and
    the interest rate