What can central banks do with monetary policy?
Why are wages the stickiest? What is expansionary policy?
What is contractionary policy?
How does the Aggregate demand curve during expansionary monetary policy?
Short run expansionary policty raises GDP, lowers unemployment, and raises the price level (memorize this)
During the great recession the Fed conducted open market operations to drive down interest rates.
What does an increase in the money supply eventually cause?
What are the two definitions of inflation?
What does contractionary monetary policy do to the aggregate demand curve?
What happens to money when the fed sells bonds?
Why does the money supply decrease during a bank failure?
Why did the money supply decrease during the great depression?
What is the Phillips curve and what does it imply?
What effect does monetary policy have if people anticipate the strategies of the central bank?
What is rational expectations theory?
Why are workers and lenders the biggest losers during unexpected inflation?
What does expansionary monetary policy do?
Who benefits from inflation?
What is meant by prices are sticky? (contracts, loans, wages)