Exam 23: The Demand for Money

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The economist who has expanded the Baumol-Tobin approach to address effects of shifts between money and nonmoney assets on the economy is

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The equation of exchange

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A key problem with the basic quantity theory of money is that it

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During the early 1980s as interest-bearing checkable deposits were incorporated into the definition of M1,

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If nominal money balances increase from $2 billion to $3 billion, while the price level increases from 100 to 200, real money balances will

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Changes in the payments system

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In developing early theories about money demand, economists limited their view of money to

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The most important difference between M1 and M2 is that

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The effects of interest rates on the transactions demand for money

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In Friedman's theory of money demand, when households expect a high rate of inflation, they will

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If nominal money balances increase from $2 billion to $3 billion, while the price level increases from 100 to 150, real money balances will

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Irving Fisher originally described velocity using transactions, rather than income or output. Would velocity calculated using transactions be a larger or a smaller number than velocity calculated using national income or GDP? Why do economists use income or output, rather than transactions, when calculating velocity? Under what circumstances might it matter how velocity is defined?

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Velocity equals

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Milton Friedman's approach to money demand focuses on

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In the Baumol-Tobin view of the transactions demand for money,

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Which of the following is a likely causative factor in the movement of M1 velocity during the 1980s?

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According to Keynes's liquidity preference theory of the demand for money, the demand for money will

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Otmar Issing, former chief economist for the ECB, argued all of the following EXCEPT

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After 1987, the Fed

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In order to buy in 2006 a bundle of goods that cost $100 in 1965, you would need roughly

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