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macro_eco_chpt

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Possible answers: opportunity cost of holding the $10,000 as money to (decrease, increase) to ($10,000,
2,20,000,200)

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Possible answers: target interest rate by 75 basis points, or 0.75%. It would achieve this by (decreasing,
increasing) the (money supply, money demand).
Because there is (more, less) money in the financial system, the quantity of money demanded
(decrease, increase), which means that bond issuers (can issue bonds at lower interest rates and still,
must raise the interest they pay to)sell bonds.

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 Possible answers: opportunity cost of holding the $10,000 as money to (decrease, increase) to ($10,000, 2,20,000,200) Possible answers: target interest rate by 75 basis points, or 0.75%. It would achieve this by (decreasing, increasing) the (money supply, money demand). Because there is (more, less) money in the financial system, the quantity of money demanded (decrease, increase), which means that bond issuers (can issue bonds at lower interest rates and still, must raise the interest they pay to)sell bonds. Possible answers: As a result of the Fed’s policy, the interest rate (falls, rises) to (2%,3,1,5,4,6). When the Fed sells bonds, the amount of money in circulation in the economy (increase, decrease). This drives interest rates (down, up), which causes businesses to invest (less, more) . The result is (decrease, increase) Possible answers: the potential output of this economy is ($11trillion, 12trillion, 14trillion, 16trillion,10trillion). Since real GDP is currently (an expansionary gap, a recessionary gap) of ($3 trillion, 5trillion, 4trillion, 1trillion, 2trillion). Possible answers: Along SRAS1, wages would (135,130,140). Point A is 135, this means that real wages are (lower than, higher than, the same as) had been negotiated, which will (increase, decrease). Labor market conditions would cause nominal wages to (decrease, increase), shifting the (LRAS, SRAS, AD) curve to the (left, right). To do so, the Fed will (decrease, increase) the money sup ...
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