If the Fed orders an expansionary monetary policy, describe what will happen to the following variables relative to what would have happened without the policy:
a. The money supply
b. Interest rates
c. Investment
d. Consumption
e. Net Exports
f. The aggregate demand curve
g. Real GDP
h. The price level
a. The money supply increases
b. Interest rates fall
c. Investment increases
d. Consumption increases
e. Net exports increase
f. The aggregate demand curve shifts to the right
g. Real GDP rises
h. The price level rises
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Indicate whether the statement is true or false
Keynesians identify three principal motives for demanding money. They are the
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