Assuming the central bank follows a money supply target, then an ...

[bucstennis@aim.com]

Assuming the central bank follows a money supply target, then an increase in the demand for money
 
  a. will shift the position of the LM schedule away from the predicted level even if the target level of the money supply is achieved.
  b. will shift the position of the LM schedule toward the predicted level as long as the target level of the money supply is achieved.
  c. may or may not shift the position of the LM schedule away from the predicted level even if the target level of the money supply is achieved.
  d. None of the above

Question 2

One of the consequences of inflation between 1950 and the 1970s was ________.
 
  A) a large increase in the federal deficit as a percentage of GDP
  B) a relaxation of the government budget constraint
  C) an increase in the dependency ratio
  D) a reduction in the ratio of debt to GDP

[recede]

Answer to Question 1

A

Answer to Question 2

D