When the Bank of England conducts an open market operation by purchasing securities from the public, _____________.

bank deposits increase but reserves decrease
bank reserves increase
public holdings of securities increase
bank deposits increase but reserves do not change

The change in the quantity of money divided by the change in the monetary base is called the ___________ multiplier.

monetary policy
monetary base
deposit
money

An increase in the interest rate creates a _______ the money demand curve, and an increase in real GDP creates a _______ the money demand curve.

movement down along; leftward shift of
leftward shift of; rightward shift of
movement up along; rightward shift of
rightward shift of; movement up along

The ripple effects that occur when the central bank sells securities in the open market include ________________.

an increase in net exports
a decrease in interest rates
a decrease in consumption and investment
an increase in short-run aggregate supply

The demand for money is the relationship between _______ and ________, other things remaining the same.

the quantity of real money demanded; the quantity of real money supplied
the quantity of money demanded; the real interest rate
the quantity of real money demanded; the interest rate
the money demanded; the money supplied

The money supply will increase if __________.

the government reduces its borrowing from foreigners
the government, through the Bank of England, increases its sales of government bonds
the government increases its borrowing from abroad
the interest rate rises

When the quantity of money demanded is less than the quantity of money supplied, people _________ bonds and the interest rate ___________.

buy; falls
sell; rises
buy; rises
sell; falls

Between 1970 and 2000, a rise in the Treasury bill rate was accompanied by _________ in the ratio of M4 to GDP.

either an increase or a decrease
no change
an increase
a decrease

When the Bank of England lowers the interest rate the pound sterling exchange rate _________ and net exports __________.

rises; increase
rises; decrease
falls; increase
falls; decrease

A fall in the real interest rate __________.

has a greater effect on autonomous consumption expenditure than a decrease in disposable income
increases autonomous consumption expenditure
decreases autonomous consumption expenditure
has no effect on autonomous consumption expenditure