Question 1

The speculative demand for money:

Accepted Answer

A)  varies inversely with income. 
B)  is only concerned with active money. 
C)  involves holding money for unexpected problems. 
D)  varies directly with the transactions demand for money. 
E)  varies inversely with the interest rate. 
A)  varies inversely with income. 
B)  is only concerned with active money. 
C)  involves holding money for unexpected problems. 
D)  varies directly with the transactions demand for money. 
E)  varies inversely with the interest rate.

Question 2

Which of the following is a belief of the monetarists?

Accepted Answer

A)  They think the Great Depression was made worse by poor conduct of monetary policy. 
B)  They do not believe monetary policy is transmitted to the economy only through its effect on interest rates and planned investment. 
C)  They believe that the interest-investment curve is vertical. 
D)  All of the above. 
A)  They think the Great Depression was made worse by poor conduct of monetary policy. 
B)  They do not believe monetary policy is transmitted to the economy only through its effect on interest rates and planned investment. 
C)  They believe that the interest-investment curve is vertical. 
D)  All of the above.

Question 3

The average number of times per year each dollar is used to transact an exchange is known as the:

Accepted Answer

A)  liquidity of money. 
B)  velocity of money. 
C)  quantity theory of money. 
D)  equation of exchange 
E)  rapidity index 
A)  liquidity of money. 
B)  velocity of money. 
C)  quantity theory of money. 
D)  equation of exchange 
E)  rapidity index

Question 4

The three functions of money are medium of exchange,

Accepted Answer

A)  measure of value, and standard of value. 
B)  measure of value, and store of value. 
C)  standard of value, and store of value 
D)  medium of value, and store of value. 
E)  measure of value, and deferred value. 
A)  measure of value, and standard of value. 
B)  measure of value, and store of value. 
C)  standard of value, and store of value 
D)  medium of value, and store of value. 
E)  measure of value, and deferred value.

Question 5

A decrease in the money supply:

Accepted Answer

A)  raises the interest rate, causing an increase in investment and an increase in GDP. 
B)  lowers the interest rate, causing an increase in investment and an increase in GDP. 
C)  raises the interest rate, causing a decrease in investment and a decrease in GDP. 
D)  lowers the interest rate, causing a decrease in investment and an increase in GDP. 
E)  lowers the interest rate, causing a decrease in investment and a decrease in GDP. 
A)  raises the interest rate, causing an increase in investment and an increase in GDP. 
B)  lowers the interest rate, causing an increase in investment and an increase in GDP. 
C)  raises the interest rate, causing a decrease in investment and a decrease in GDP. 
D)  lowers the interest rate, causing a decrease in investment and an increase in GDP. 
E)  lowers the interest rate, causing a decrease in investment and a decrease in GDP.

Question 6

Assuming the economy is in a recession, Keynesian economists predict that lower wages will shift the short-run aggregate supply curve rightward.

Accepted Answer

A) True 
 B)False

The speculative demand for money:

Which of the following is a belief of the monetarists?

The average number of times per year each dollar is used to transact an exchange is known as the:

The three functions of money are medium of exchange,

A decrease in the money supply:

Assuming the economy is in a recession, Keynesian economists predict that lower wages will shift the short-run aggregate supply curve rightward.

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets and Income Distribution

Gross Domestic Product

Business Cycles and Unemployment

Inflation

Aggregate Demand and Supply

Fiscal Policy

The Public Sector

Federal Deficits, Surpluses, and the National Debt

Money and the Federal Reserve System

Money Creation

International Trade and Finance

Economies in Transition

Growth and the Less-Developed Countries

Filters

Exam 20: Policy Disputes Using the Self-Correcting Aggregate Demand and Supply Model

The speculative demand for money:

Which of the following is a belief of the monetarists?

The average number of times per year each dollar is used to transact an exchange is known as the:

The three functions of money are medium of exchange,

A decrease in the money supply:

Assuming the economy is in a recession, Keynesian economists predict that lower wages will shift the short-run aggregate supply curve rightward.

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets and Income Distribution

Gross Domestic Product

Business Cycles and Unemployment

Inflation

Aggregate Demand and Supply

Fiscal Policy

The Public Sector

Federal Deficits, Surpluses, and the National Debt

Money and the Federal Reserve System

Money Creation

International Trade and Finance

Economies in Transition

Growth and the Less-Developed Countries

Filters