According to the simple quantity theory of money, an increase in the money supply will shift the __________ curve to the right and raise __________.

Monetarists believe that an increase in the money supply will raise both Real GDP and the price level in the short run, and will only raise Real GDP in the long run.

A moral hazard problem occurs after a loan is made, and the adverse selection problem occurs before a loan is made.

When the current state of the economy is such that Real GDP is equal to Natural Real GDP, the economy is in  ____________________ .  In this situation, the (actual) unemployment rate is ___________ the natural unemployment rate, and there is ________________ in the labor market.

The Fed is one of the largest departments within the U.S. Treasury.

If the economy is operating at a point beyond its institutional production possibilities frontier (institutional PPF), then the economy is

If the natural unemployment rate is 7 percent and the current unemployment rate is 5 percent, then the economy is

The period that elapses between the passage of legislation reducing taxes and the time the tax cut is put into effect is called the __________ lag.

Suppose the time period is before October 2008 and the Fed wants to decrease the money supply. It could [req_reserve] the required reserve ratio, conduct an open market [open_market], or [discount_rate] the discount rate.

In seeking to explain what determines GDP, monetarists focus on the money supply while Keynesians focus on the spending components of total expenditures.