Chapter 17 Monetary Policy and Inflation

| November 9, 2018

30)
When the Fed conducts an open market sale, it leads to a higher level of
investment and output in the economy.

31)
To increase the level of output, the Fed should conduct an open market sale.

32)
An increase in the money supply will appreciate a country’s currency.

33)
An increase in the reserve requirement will lead to increased net exports.

34)
Explain what happens to the money supply, interest rates, investment spending
and GDP when the Fed makes open market bond purchases.

35)
Describe the channels through which an open market purchase of bonds by the Fed
affects output in a closed economy.

36)
Describe the channels through which an open market sale of bonds by the Fed
affects output in a closed economy.

37)
Describe the channels through which open market purchases by the Fed affects
output in an open economy.

38)
What is the “good news” and the “bad news” about a lower
value of the U.S. dollar?

39)
What is the “good news” and the “bad news” about a higher
value of the U.S. dollar?

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