With the value of money on the vertical axis, the money supply curve is
a. upward sloping because people supply a larger quantity of money when the value of money increases.
b. downward sloping because people supply a larger quantity of money when the value of money decreases.
c. horizontal because we assume the central bank controls the money supply
d. vertical because we assume the central bank controls the money supply.
d
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The assumption that people may choose to hold excess money balances when there is an increase in the money supply is emphasized by
A) supply-side economists. B) Monetarists. C) Keynesians. D) rational expectations theorists.
To analyze policy options, economists are forced to deal with:
a. politicians b. business people c. rotating statistical values d. things that have not occurred e. None of these is correct.