Exam 8: Money, the Price Level, and Inflation

Use the information below to answer the following questions. Fact 8.4.2 The Bank of Hobbiton has chosen the following initial balance sheet: -Refer to Fact 8.4.2.Bilbo Baggins comes to the bank and deposits a $100 bill.After Bilbo's deposit, but before any other actions occur, the total quantity of money in the economy

Which of the following items is money in Canada today?

You are given the following information about the economy of Nocoin: The banks have deposits of $300 billion.Their reserves are $15 billion, two thirds of which is in deposits with the bank.Households and firms hold $30 billion in bank notes.There are no coins! The banks have no excess reserves. The Bank of Nocoin, the central bank, increases bank reserves by $0.5 billion.The quantity of money _______. The change in the quantity of money is not equal to the change in the monetary base because _______. The money multiplier is _______.

If households and firms find they are holding less money than desired, they will

If the interest rate is below the equilibrium interest rate, how is equilibrium achieved in the money market?

Suppose that the interest rate is greater than the equilibrium interest rate.Which of the following statements is true? I.There is an excess quantity of money. II.The quantity of money automatically increases. III.The interest rate falls to achieve equilibrium.

Real money is equal to

Real GDP is $2,560 billion, the quantity of money $800 billion, and the velocity of circulation is 4.The GDP deflator is

Which of the following is an economic function of a chartered bank?

Which of the following statements about depository institutions is false?

Consider the following data from the economy of Adanac: • Currency outside banks: $15 billion • Personal and non- personal chequable deposits: $40 billion • Personal non- chequable deposits: $50 billion • Non- personal non- chequable deposits: $125 billion • Fixed term deposits: $200 billion The value of MI is $_______ billion and the value of M2 is $_______ billion.

When the Bank of Canada makes an open market sale, its assets _______ and its liabilities _______.

If you can find someone to swap what you have for what you want, then

Use the information below to answer the following questions. Fact 8.4.1 The Bank of Speedy Creek has chosen the following initial balance sheet: -Refer to Fact 8.4.1.Based on the Bank of Speedy Creek's initial balance sheet, what is its desired reserve ratio?

In a world with no money, costs are expressed in terms of other goods.If one video game costs two hamburgers, and a hamburger costs three pops, how many pops would it take to buy a video game?

Which one of the following is not a function of money?

Use the figure below to answer the following questions. Figure 8.5.2 -Refer to Figure 8.5.2.Which one of the following best shows the effect of a decrease in the market price of bonds?

Which one of the following is most liquid?

Which one of the following will shift the demand for money curve rightward?

Which one of the following is not a depository institution?