Exam 8: Money, the Price Level, and Inflation

The discount rate is the interest rate that

Depository institutions

A medium of exchange is

When the nominal interest rate rises, the opportunity cost of holding money

Cigarettes served as money in some POW camps during World War II. Given this fact, we would expect to observe

Aside from being a means of payment, the other functions of money are

When the monetary base increases by $2 billion, the quantity of money increases by $10 billion. Thus, the money multiplier equals

Suppose that you find out from an L.L. Bean catalogue that a sweater costs $30.00. In this case, money is serving as a

The velocity of circulation is

Which of the following decreases the demand for money?

Assuming velocity of circulation is constant, a 10 percent increase in the quantity of money leads to a 10 percent increase in nominal GDP in both the short run and the long run.

In Zealand, banks' desired reserve ratio is 20 percent and the currency drain also equals 20 percent. The money multiplier equals

Which of the following is the most liquid asset?

The money supply, as measured by M1, consists almost entirely of currency.

On a given day the quantity of money is ________ and the supply of money curve is ________.

Frank spends a Saturday afternoon at the Dodge dealership looking at new trucks. The model that he is interested in has a sticker price of $35,000. The fact that the price is quoted in dollars is an example of money used as a

-The figure above illustrates the effect of

Money is created by

The most direct way in which money replaces barter is through its use as a

What is the FOMC? Who are the members of the FOMC? What policy does the FOMC decide?