When We Assume That the Supply of Money Is a Variable

question 72

Multiple Choice

When we assume that the supply of money is a variable that the central bank controls,we

• A)must then assume as well that the demand for money is not influenced by the value of money.
• B)must then assume as well that the price level is unrelated to the value of money.
• C)are ignoring the fact that,in the real world,households are also suppliers of money.
• D)are ignoring the complications introduced by the role of the banking system.

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Definitions:

Sherman Act

A United States antitrust law passed in 1890 that prohibits monopolistic practices and promotes competition.

Horizontal Restraint

A type of anti-competitive practice that occurs between businesses at the same level of the supply chain, such as agreements between competitors to fix prices or divide markets.

Market Extension Merger

A merger between companies in similar industries but different markets, aimed at expanding the market reach of products or services.

Federal Trade Commission

An independent agency of the United States government tasked with promoting consumer protection and eliminating and preventing anticompetitive business practices.