the economics of money, banking, and financial markets

722 $

© 2014 Pearson Canada Inc.$

15. 
    

    In the money market, a condition of excess demand for money can be eliminated by a
    ____ in aggregate output or a ____ in the interest rate, everything else held constant.
    A) rise; rise
    B) rise; fall
    C) fall; rise
    D) fall; fall
    Answer: C
    Diff: 2 Type: MC Page Ref: 561
    Skill: Recall
    Objective List: 23.2 Explain how the IS - MP model can be used to address questions about the
    effectiveness of monetary and fiscal policy

    
    


16. 
    

    In the money market, a condition of excess supply of money can be eliminated by a
    ____ in aggregate output or a ____ in the interest rate, everything else held constant.
    A) rise; rise
    B) rise; fall
    C) fall; rise
    D) fall; fall
    Answer: B
    Diff: 2 Type: MC Page Ref: 561
    Skill: Recall
    Objective List: 23.2 Explain how the IS - MP model can be used to address questions about the
    effectiveness of monetary and fiscal policy

    
    


17. 
    

    In the IS-MP framework, an expansionary fiscal policy resulting from government
    purchases, causes aggregate output to ____ and the interest rate to ____, everything
    else held constant.
    A) increase; increase
    B) increase; decrease
    C) decrease; decrease
    D) decrease; increase
    Answer: A
    Diff: 2 Type: MC Page Ref: 564
    Skill: Recall
    Objective List: 23.2 Explain how the IS - MP model can be used to address questions about the
    effectiveness of monetary and fiscal policy