Supply-side economic policies seek toA) raise interest rates through contractionary monetary policy.B) increase federal government expenditures.C) increase consumption expenditures by increasing taxes.D) increase saving and investment using tax incentives.

8. If the central bank pursues a monetary policy that is more expansionary than what firms and people expect, then the central bank must be trying to A) boost output in the short run. B) constrain output in the short run. C) constrain prices. D) boost prices in the short run. 9. High unemployment is undesirable because it A) results in a loss of output. B) always increases inflation. C) always increases interest rates. D) reduces idle resources. 10. Supply-side economic policies seek to A) raise interest rates through contractionary monetary policy. B) increase federal government expenditures. C) increase consumption expenditures by increasing taxes. D) increase saving and investment using tax incentives.

Which of the following policy actions by a country’s central bank would increase the money supply in the economy?a.Increasing the policy rate.b.Increasing the minimum reserve requirements.c.Reducing the interest paid on bank reserves deposited with the central bank.d.Selling government bonds through open market operations.

The implementation of a contractionary policy by the Federal Reserve would result in:Question 3Answera.increased spendingb.increased economic growthc.lower interest ratesd.lower unemploymente.lower inflation

To increase the money supply, the central bank can _____________.a.Cut taxesb.Purchase bonds in the open-marketc.Encourage people to held more cash (currency in circulation)d.Increase the government spending

An increase in the interest rateA) increases the demand for money.B) increases the quantity of money demanded.C) decreases the demand for money.D) decreases the quantity of money demanded.