1. When the central bank buys €1,000,000 worth of government bonds from the public, the money supply:
- increases by less than €1,000,000.
- increases by more than €1,000,000.
- increases by €1,000,000.
- decreases by €1,000,000.
- does not change.
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Other questions in this quiz
2. An increase in money demand caused by an increase in income ______ the LM curve
- causes an upward shift in
- causes a movement along
- causes an downward shift in
3. The key assumption of the basic Keynesian model is that in the short run firms ______.
- change prices frequently
- produce potential output
- meet demand at preset prices
- operate just as they do in the long run
- adjust prices to bring sales in line with capacity
4. The unemployment rate equals the number of people:
- unemployed plus discouraged workers divided by the labour force.
- unemployed plus discouraged workers divided by the number employed.
- unemployed divided by the labour force.
- unemployed divided by the number employed
5. The money demand curve will shift to the left if
- the price level decreases.
- real income increases.
- the nominal interest rate increases
- the nominal interest rate decreases.
- price level increases