Macroeconomic Unit 4 Review

2. A leftward shift of the MS curve on the money market graph indicates the Fed is utilizing __ monetary policy.
3. The Fed would __ bonds if it were to purse expansionary monetary policy.
6. Interest rate that banks charge each other for short term loans
8. This graph shows the relationship between borrowers and savers.
12. The money __ is equal to 1/reserve ratio.
14. Raising the reserve ratio would, lower money supply, raise interest rates, decrease investments, and shift AD to the __.
16. The percent of money banks must keep in their reserve before they can loan to investors
17. In the ample reserve framework, changing the __ rate will directly affect the interest rates.
19. when money is used as a means to acquire goods and services.

1. The money market graph has __ interest on the vertical axis.
4. When money is being used to compare
5. The Fed's primary monetary policy tool, abbreviated OMO, involves buying and selling __.
7. The interest rate the Federal Reserve charges to member banks.
9. The type of money that is only valuable of government decree and social pacts.
10. This will increase in the loanable fund market if there are more capital inflows or if people save more!
11. The central bank of the United States that conducts monetary policy.
13. __ policy are actions by the central bank to stabilize the economy by changing money supply and interest rates.
14. Banks do this to "create" money.
15. The loanable funds graph uses, the __ interest rates on the vertical axis.
18. If the Fed __ bonds, MS will decrease, interest rates go up, investment spending goes down, and AD shifts left.