When a $500 check is cleared from Bank A to Bank B, the M2 money supply:

The difference between the nominal interest rate and the real interest rate is the

A) money growth rate minus the growth rate of real GDP. B) GDP growth rate. C) price level. D) inflation rate. E) unemployment rate.

Which of the following is NOT true of the interest rate channel?

A) Bank loans play no special role. B) The Fed changes the real interest rate which affects the components of aggregate expenditures. C) Borrowers are indifferent as to how and from whom they raise funds. D) Alternative sources of funds are not substitutes for each other.