1.What operating procedures of the Fed (described in Chapter 18) might explain how movements in output might cause movements in the money supply? 2. “In every business cycle in the past 100 years, the...

1.What operating procedures of the Fed (described in Chapter 18) might explain how movements in output might cause movements in the money supply?

2. “In every business cycle in the past 100 years, the rate at which the money supply is growing always decreases before output does. Therefore, the money supply causes business cycle movements.” Do you agree? What objections can you raise against this argument?