1)When the money supply increases, the interest rate rises,ceteris paribus.

a. True

b. False

2

2)Focusing on the growth in the money supply when the demand for money is changing unpredictably will lead to large uctuations in the interest rate.

a. True

b. False

3)According to the Phillips curve, society faces a trade-off between which two variables?

a. government deficits and unemployment

b. inflation and unemploymen

c. the actual unemployment rate and the natural rate of unemployment

d. inflation and real output

if the demand for money increases, and the Bank of Canada wants to keep the interest rate stable, it will need to increase the money supply.

a. True

b. False