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10. Suppose that a change in transaction technology reduces the amount of currency people want to hold relative to demand deposits. If the Fed does nothing, the money supply will tend to bonds in open-market But the Fed can hold the money supply constant by operations. a. increase, buying b. increase, selling c. decrease, buying d. decrease, selling

10. Suppose that a change in transaction technology reduces the amount of currency people want to hold relative to demand deposits. If the Fed does nothing, the money supply will tend to bonds in open-market But the Fed can hold the money supply constant by operations. a. increase, buying b. increase, selling c. decrease, buying d. decrease, selling

Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
8th Edition
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter34: The Influence Of Monetary And Fiscal Policy On Aggregate Demand
Section: Chapter Questions
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10. Suppose that a change in transaction technology reduces the amount of currency people want to hold relative to demand deposits. If the Fed does nothing, the money supply will tend to bonds in open-market But the Fed can hold the money supply constant by operations. a. increase, buying b. increase, selling c. decrease, buying d. decrease, selling 11. Which of the following changes would contribute to a decline in the index of leading indicators, suggesting that a recession is more likely? a. a rise in stock prices b. a rise in building permits c. a decline in initial claims for unemployment insurance d. a decline in the slope of the yield curve 12. Stagflation-lower output and higher prices-is caused by a. an expansion in aggregate demand. b. a contraction in aggregate demand. c. a favorable shock to aggregate supply. d. an adverse shock to aggregate supply.
Transcribed Image Text:10. Suppose that a change in transaction technology reduces the amount of currency people want to hold relative to demand deposits. If the Fed does nothing, the money supply will tend to bonds in open-market But the Fed can hold the money supply constant by operations. a. increase, buying b. increase, selling c. decrease, buying d. decrease, selling 11. Which of the following changes would contribute to a decline in the index of leading indicators, suggesting that a recession is more likely? a. a rise in stock prices b. a rise in building permits c. a decline in initial claims for unemployment insurance d. a decline in the slope of the yield curve 12. Stagflation-lower output and higher prices-is caused by a. an expansion in aggregate demand. b. a contraction in aggregate demand. c. a favorable shock to aggregate supply. d. an adverse shock to aggregate supply.
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