Does the supply of money depend on the interest rate? If not explain why.
1. Does the supply of money depend on the interest rate? If not explain why.
2. How did the classical economists transform the equation of exchange into the quantity theory of
money?
3. Why was Keynes pessimistic about the effectiveness of an expansionary monetary policy in a
period of recession and what did he suggest?
4. What is the short-term effect of an expansionary monetary policy according to the monetarists?
5. Which monetary tool(s) did the Federal Reserve use to fix the economy during the 2007-2008
crisis?
Answer preview to does the supply of money depend on the interest rate? If not explain why.
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