Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Macroeconomics > Chapter 15 - THE INFLUENCE OF MONETARY POLICY ON AGGREGATE DEMAND > Flashcards

Chapter 15 - THE INFLUENCE OF MONETARY POLICY ON AGGREGATE DEMAND Flashcards

1
Q

What are the three reasons why the aggregate-demand curve slopes downward?

A

The aggregate-demand curve slopes downward for three reasons:

  1. The Wealth Effect
  2. The Interest Rate Effect
  3. The Real Exchange-Rate Effect

The interest rate effect is the most important reason

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What two method does Bank of Canada use to alters the money supply?

A
  1. Changing the bank rate
  2. Open-market operations:
    * Buying and selling federal government bonds
    * Foreign Exchange market operations
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is a Flexible exchange rate?

A

Flexible exchange rate is a policy by which the value of the exchange rate is allowed to vary without interference by the central bank.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly

Macroeconomics (13 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions