Final

In the absence of an accommodating monetary policy, a push by workers to get higher wages will cause

Although the U.S. has a well-developed government bond market and has experienced relatively small budget deficits relative to GDP, deficits can be inflationary if

Everything else held constant, in the market for reserves, when the federal funds rate is 3%, lowering the discount rate from 5% to 4%

The short-run aggregate supply curve is upward sloping because in the short run, costs of many factors that go into producing goods and services are ________, meaning that the price for a unit of output will ________ relative to input prices and the profit per unit will rise.

In the market for reserves, an open market purchase shifts the supply curve to the

In the market for reserves, when the federal funds interest rate is below the discount rate, the supply curve of reserves is

Which of the following is most likely to lead to inflationary monetary policy?

Suppose the economy is producing at the natural rate of output. An open market sale of bonds by the Fed will cause ________ in real GDP in the long run and ________ in the aggregate price level in the long run, everything else held constant.

The opportunity cost of holding excess reserves is

Franco Modigliani has found that an expansionary monetary policy can cause stock market prices to ________ and consumption to ________.

According to Milton Friedman, income declines relative to permanent income during a business cycle contraction, causing the demand for money relative to actual income to increase, thereby
causing velocity to

The Fed's lender-of-last-resort function

When the Fed acts as a lender of last resort, the type of lending it provides is

Suppose the economy is producing at the natural rate of output. Assuming a fixed natural rate of output and everything else held constant, the development of a new, more productive technology will cause ________ in the unemployment rate in the long run and ________ in the aggregate price level in the short run.

There are two types of open market operations: ________ open market operations are intended to change the level of reserves and the monetary base, and ________ open market operations are intended to offset movements in other factors that affect the monetary base.

If the Fed wants to drain reserves from the banking system, it will

Everything else held constant, in the market for reserves, when the demand for federal funds intersects the reserve supply curve along the horizontal section, increasing the discount rate

Open market purchases raise the _____ thereby raising the _____.

Open market sales shrink _____ thereby lowering _____.

In the market for reserves, an open market _____ shifts the supply curve to the _____, lowering the federal funds interest rate.

Everything else held constant, if workers expect an increase in the price level, ________ aggregate supply ________.

The vertical section of the supply curve of reserves falls when

The Fed uses three policy tools to manipulate the money supply: _____, which affect reserves and the monetary base; changes in _____, which affect reserves and the monetary base by influencing the quantity of discount loans; and changes in _____, which affect the money multiplier.

In the market for reserves, an increase in the reserve requirement shifts the demand curve to the

The interest rate for primary credit is usually set ________ basis points ________ the federal funds rate. In March 2008, this gap was changed to ________ basis points.

The interest rate charged on overnight loans of reserves between banks is the

An increase in reserve requirements reduces the money supply since it causes

Funds held in ________ are subject to reserve requirements.

By analyzing aggregate demand via its component parts, we can conclude that changes in the money supply

How do we prevent the inflationary fire from igniting again and stop the roller coaster ride in the inflation rate of the last 40 years?" Milton Friedman's famous proposition suggests the simple solution:

When bad storms slow the check-clearing process, float tends to ________ causing the Fed to initiate defensive open market ________.

If Treasury deposits at the Fed are predicted to fall, the manager of the trading desk at the New York Fed bank will likely conduct ________ open market operations to ________ reserves.

According to the quantity theory of money, an increase in the money supply ________ aggregate ________, everything else held constant.

According to aggregate demand and supply analysis, the rising oil prices coupled with the subprime financial crisis in 2007-2008 caused the unemployment rate to ________ and the level of real aggregate output to ________.

The quantity of reserves demanded equals

The most important advantage of discount policy is that the Fed can use it to

The main advantage of using reserve requirements to control the money supply and interest rates is

The Fed can offset the effects of an increase in float by engaging in

If the money supply is $600 and nominal income is $3,000, the velocity of money is

An expansionary monetary policy lowers the real interest rate, causing the domestic currency to ________, thereby ________ net exports.

The two types of open market operations are

The opportunity cost of holding excess reserves is the federal funds rate

The equation of exchange is

In the market for reserves, an open market sale shifts the supply curve to the _____ and causes the federal funds interest rate to _____.

Suppose on any given day the prevailing equilibrium federal funds rate is above the Federal Reserve's federal funds target rate. If the Federal Reserve wishes for the federal funds rate to be at their target level, then the appropriate action for the Federal Reserve to take is a ________ open market ________, everything else held constant.