1. List and briefly explain the steps in the transmission of monetary policy. (How do you get from the FOMC deciding to lower the target for the Federal Funds Rate to a change in AD?)
2. In the summer of 2008, the price of crude oil spiked to $147 per barrel. (The earlier price was about $80.) Did this primarily affect Aggregate Supply or Aggregate Demand? What was the effect? (An increase or a decrease.) Given that, what was the expected effect on Real GDP and the Price Level?