Author Question: The negative supply shock of 2007, compared to the shocks in 1973 & 1979, involved ________. ... (Read 30 times)

tfester · **on:** Jun 30, 2018

The negative supply shock of 2007, compared to the shocks in 1973 & 1979, involved ________.

A) a larger decrease in aggregate demand
B) larger decreases in the real interest rate
C) smaller decreases in aggregate supply
D) larger increases in the real interest rate

Question 2

Other things equal, if the Fed increases the discount rate,

A) the monetary base will decrease and the money supply will remain constant.
B) the monetary base and the money supply will both decrease.
C) the money supply will decrease and the monetary base will remain constant.
D) the monetary base will decrease and the money supply may increase or remain constant.