FP1 5.02 - Money Supply and GDP

Front

What does the money supply include?

Back

Currency and other liquid instruments

Front

What is GDP a measurement of?

Back

The total value of all finished goods and services produced within a country's borders

Front

What is nominal GDP?

Back

GDP calculated at current market prices

Front

What is the relationship between money supply and nominal GDP?

Back

Nominal GDP tends to rise with the money supply

Front

What is real GDP?

Back

GDP adjusted for inflation

Front

What is one effect of increasing the money supply in the short term?

Back

Lower interest rates

Front

What is a potential long-term impact of increasing the money supply? Options: Stable asset prices, Deflation, Speculative investments and asset price escalation, Decreased economic activity

Back

Speculative investments and asset price escalation

Front

What is one of the U.S. Federal Reserve's macroeconomic goals? Options: Reducing employment, Decreasing GDP, Price stability, Increasing the money supply indefinitely

Back

Price stability

Front

What are open market operations?

Back

The buying or selling of Treasury bonds and other securities by the Federal Reserve

Front

Who controls the money supply in the United States?

Back

The Federal Reserve