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What would be the effect on the demand for narrow money if an increase in real GDP?
Onikdasgupta
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What is the relationship between demand for money and interest rates?
as interest rates increase, demand for money increases.
What happens to money demand when there is an increase in interest rates?
money demand will decrease
If economy enters in boom period is demand for money increase or decrease?
increase
What happens to the shifting of LM curve when there is an increase in demand of money?
It shifts to the left
What is the most likely effect of the fed lowering the discount rate on overnight loans?
An increase in the money supplyAn increase in the money supply
What is the relationship between demand for money and interest rates?
as interest rates increase, demand for money increases.
What happens to money demand when there is an increase in interest rates?
money demand will decrease
If economy enters in boom period is demand for money increase or decrease?
increase
What happens when theres an increase in demand follwed by an increase in supply?
Someone makes money
What happens to the shifting of LM curve when there is an increase in demand of money?
It shifts to the left
Will the money supply increase if people deposit their cash into a demand deposit account?
yes
What is the most likely effect of the fed lowering the discount rate on overnight loans?
An increase in the money supplyAn increase in the money supply
Why did northerner industrialists favor protective tariff's?
To reduce competition from foreign grain producers. Northern America industrialists increase the demand for American. This is for manufactured goods.
Describes the most likely effect of the fed buying millions of dollars in t-bonds?
an increase in the money supplyAn increase in the money supply
LM curve relatively flat?
he LM curve is flat when money demand is very responsive to interest rates. That is, when you have a flat money demand curve. Interest rates only have to increase by a little in order to get rid of bonds since money demand is very reactive to interest rates.
What effects would the expectation of rapid inflation have on aggregate demand?
since you are assuming that the price value of money will increase you will spend more money now then later... thus, causing AD to increase
What is non monetised deficit?
Counteracts the inflationary effect of the deficit in the operation balance
