Asked by Crystal Weaver on Jul 09, 2024
Verified
When the value of money is on the vertical axis, the money supply curve is vertical and shifts right if the Federal Reserve buys bonds.
Vertical Axis
In a graph or chart, this axis represents the range of values or criteria that are measured upward and downward.
Money Supply Curve
A graphical representation showing the relationship between the quantity of money in an economy and the price level or interest rates.
Federal Reserve
The central banking system of the United States, responsible for setting monetary policy.
- Describe the impact of monetary policy decisions by the Federal Reserve on the economy.
Verified Answer
BK
Brian KunstJul 09, 2024
Final Answer :
True
Explanation :
When the Federal Reserve buys bonds, it increases the money supply by injecting more money into the economy, which is represented by a rightward shift of the vertical money supply curve in a graph where the value of money is on the vertical axis.
Learning Objectives
- Describe the impact of monetary policy decisions by the Federal Reserve on the economy.