Slivinskie CH 15

Transmission Mechanism is

• routes, or channels, traveled by the ripple effects that the money market creates and that affect the goods-and-services market

• routes, or channels, traveled by the ripple effects that the money market creates and that don't affect the goods-and-services market

• routes, or channels, bypassed by the ripple effects that the money market creates and that affect the goods-and-services market

The goods and services market is represented by ____ and _____ curves

• AD , AS

• AD , SRAS

• SRAS, LRAS

In the Keynesian Transmission Mechanism, Demand for Money (Balances) has a

• inverse relationship between the quantity demanded of money (balances) and the price of holding money (balances)

• positive relationship between the quantity demanded of money (balances) and the price of holding money (balances)

• negative relationship between the quantity demanded of money (balances) and the price of holding money (balances)

In the Keynesian method, ____ interest rates causes the Quantity of Money to ____ (multiple right answers)

• increased , decrease

• decreased , decrease

• decreased , increase

• increase , increase

In the Keynesian Transmission Mechanism, the supply of money is a ____ line

• vertical

• downward

• upward

In Keynesian Transmission Mechanism, the money market is in equilibrium when the quantity demanded of money _____ the quantity supplied

• equals

• is greater than

• is less than

When money supply increases in the KTM (multiple)

• i decreases

• I increases

• AD increase

• Q increases

• P stays constant

When money supply decreases in the KTM (multiple)

• i increases

• I decreases

• AD decreases

• Q decreases

• P stays constant

Monetarist Transmission Mechanism proposes a direct link between the money market and the goods-and-services market

• True

• False

In the Monetarist Transmission Mechanism, what happens to AD, Q, and P when M increases

• AD goes up, Q goes up, P goes up

• AD goes down, Q goes up, P goes up

• AD goes up, Q goes up, P goes down