Question 1

Money is each of the following except

Accepted Answer

A)  a medium of exchange. 
B)  a store of value. 
C)  a means by which the central bank can always, and permanently, affect production. 
D)  a unit of account. 
A)  a medium of exchange. 
B)  a store of value. 
C)  a means by which the central bank can always, and permanently, affect production. 
D)  a unit of account. C

Question 2

Inflation tax is

Accepted Answer

A)  the sales tax. 
B)  a tax on nominal goods. 
C)  a special tax introduced in the 1970s to fight inflation. 
D)  the revenue from seigniorage. 
A)  the sales tax. 
B)  a tax on nominal goods. 
C)  a special tax introduced in the 1970s to fight inflation. 
D)  the revenue from seigniorage. D

Question 3

The demand for money will fall for each of the following reasons,except

Accepted Answer

A)  more ATMs. 
B)  higher real GDP. 
C)  lower interest rates on transactions accounts at banks. 
D)  more risky banks. 
A)  more ATMs. 
B)  higher real GDP. 
C)  lower interest rates on transactions accounts at banks. 
D)  more risky banks. C

Question 4

The money supply is vertical because

Accepted Answer

A)  prices are indeterminate. 
B)  prices have no real impact. 
C)  the money supply is set by policy. 
D)  prices are counter-cyclical. 
A)  prices are indeterminate. 
B)  prices have no real impact. 
C)  the money supply is set by policy. 
D)  prices are counter-cyclical.

Question 5

The current demand for money increases when

Accepted Answer

A)  current real income decreases. 
B)  future real income decreases. 
C)  the nominal rate of interest decreases. 
D)  none of the above. 
A)  current real income decreases. 
B)  future real income decreases. 
C)  the nominal rate of interest decreases. 
D)  none of the above.

Question 6

Seigniorage is government revenue raised by

Accepted Answer

A)  a tax on transactions. 
B)  issuance of treasury bonds. 
C)  issuance of money. 
D)  lump-sum taxation. 
A)  a tax on transactions. 
B)  issuance of treasury bonds. 
C)  issuance of money. 
D)  lump-sum taxation.

Question 7

In the intertemporal model with money,the optimal amount of money is

Accepted Answer

A)  equal to total output. 
B)  equal to consumption and investment. 
C)  zero. 
D)  irrelevant as long as it is not zero. 
A)  equal to total output. 
B)  equal to consumption and investment. 
C)  zero. 
D)  irrelevant as long as it is not zero.

Question 8

The money supply is

Accepted Answer

A)  endogenous. 
B)  determined by policy. 
C)  irrelevant. 
D)  indeterminate. 
A)  endogenous. 
B)  determined by policy. 
C)  irrelevant. 
D)  indeterminate.

Question 9

The supply curve for credit card services is an increasing function of

Accepted Answer

A)  the price of credit card services. 
B)  bank profitability. 
C)  the real interest rate. 
D)  the quantity of money. 
A)  the price of credit card services. 
B)  bank profitability. 
C)  the real interest rate. 
D)  the quantity of money.

Question 10

When the nominal interest rate increases,the quantity of credit card services

Accepted Answer

A)  increases. 
B)  decreases. 
C)  stays constant. 
D)  moves in unpredictable ways. 
A)  increases. 
B)  decreases. 
C)  stays constant. 
D)  moves in unpredictable ways.

Question 11

Going from M0 to M1 and to M2,what is the principle?

Accepted Answer

A)  from household money demand to firm money demand 
B)  from illiquid to liquid 
C)  from most usable to least usable for transaction purposes 
D)  from most usable to least usable as a store of value 
A)  from household money demand to firm money demand 
B)  from illiquid to liquid 
C)  from most usable to least usable for transaction purposes 
D)  from most usable to least usable as a store of value

Question 12

Which of the following decreases money demand?

Accepted Answer

A)  Bonds become more risky. 
B)  The introduction of online banking. 
C)  Disruptions in the banking system. 
D)  An increase in ATM fees. 
A)  Bonds become more risky. 
B)  The introduction of online banking. 
C)  Disruptions in the banking system. 
D)  An increase in ATM fees.

Question 13

The zero lower bound on the nominal interest rate arises because

Accepted Answer

A)  if the nominal interest rate were less than zero, an arbitrage opportunity would exist. 
B)  bank profits must be zero. 
C)  the government would not allow it. 
D)  the economy would crash. 
A)  if the nominal interest rate were less than zero, an arbitrage opportunity would exist. 
B)  bank profits must be zero. 
C)  the government would not allow it. 
D)  the economy would crash.

Question 14

In practice,money growth targeting was

Accepted Answer

A)  a good idea. 
B)  a policy introduced in the U.S. in the 1970s, which continues to the present. 
C)  better than interest rate targeting. 
D)  a failure. 
A)  a good idea. 
B)  a policy introduced in the U.S. in the 1970s, which continues to the present. 
C)  better than interest rate targeting. 
D)  a failure.

Question 15

The nominal return of money is

Accepted Answer

A)  0. 
B)  r. 
C)  R. 
D)  i. 
A)  0. 
B)  r. 
C)  R. 
D)  i.

Question 16

The real return on money is

Accepted Answer

A)  0. 
B)  -r. 
C)  -i. 
D)  -R. 
A)  0. 
B)  -r. 
C)  -i. 
D)  -R.

Question 17

The classical dichotomy states that

Accepted Answer

A)  money is superneutral. 
B)  goods markets are separated from labor markets. 
C)  demand is separate from supply. 
D)  real markets determine nominal outcomes, not the reverse. 
A)  money is superneutral. 
B)  goods markets are separated from labor markets. 
C)  demand is separate from supply. 
D)  real markets determine nominal outcomes, not the reverse.

Question 18

Price tags attached to goods for purchase at a store would be an example of money's role as a

Accepted Answer

A)  medium of exchange. 
B)  store of value. 
C)  unit of account. 
D)  none of the above 
A)  medium of exchange. 
B)  store of value. 
C)  unit of account. 
D)  none of the above

Question 19

Credit cards are not a form of money because

Accepted Answer

A)  money needs to be tangible (not virtual). 
B)  credit cards just extend a loan. 
C)  credit cards just relate to an account. 
D)  credit card balances are in fact counted as money. 
A)  money needs to be tangible (not virtual). 
B)  credit cards just extend a loan. 
C)  credit cards just relate to an account. 
D)  credit card balances are in fact counted as money.

Question 20

In a model with money neutrality,how much should the money supply be increased to obtain a 1% increase in real output?

Accepted Answer

A)  -1% 
B)  between 0 and 1% 
C)  1% 
D)  It cannot be done. 
A)  -1% 
B)  between 0 and 1% 
C)  1% 
D)  It cannot be done.

Money is each of the following except

Inflation tax is

The demand for money will fall for each of the following reasons,except

The money supply is vertical because

The current demand for money increases when

Seigniorage is government revenue raised by

In the intertemporal model with money,the optimal amount of money is

The money supply is

The supply curve for credit card services is an increasing function of

When the nominal interest rate increases,the quantity of credit card services

Going from M0 to M1 and to M2,what is the principle?

Which of the following decreases money demand?

The zero lower bound on the nominal interest rate arises because

In practice,money growth targeting was

The nominal return of money is

The real return on money is

The classical dichotomy states that

Price tags attached to goods for purchase at a store would be an example of money's role as a

Credit cards are not a form of money because

In a model with money neutrality,how much should the money supply be increased to obtain a 1% increase in real output?

Introduction

Measurement

Business Cycle Measurement

Consumer and Firm Behavior: The Work-Leisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Search and Unemployment

Economic Growth: Malthus and Solow

Income Disparity Among Countries and Endogenous Growth

A Two-Period Model: The Consumption-Savings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model with Investment

Business Cycle Models with Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking

Inflation, the Phillips Curve, and Central Bank Commitment

Filters

Exam 12: Money, Banking, Prices, and Monetary Policy

Money is each of the following except

Inflation tax is

The demand for money will fall for each of the following reasons,except

The money supply is vertical because

The current demand for money increases when

Seigniorage is government revenue raised by

In the intertemporal model with money,the optimal amount of money is

The money supply is

The supply curve for credit card services is an increasing function of

When the nominal interest rate increases,the quantity of credit card services

Going from M0 to M1 and to M2,what is the principle?

Which of the following decreases money demand?

The zero lower bound on the nominal interest rate arises because

In practice,money growth targeting was

The nominal return of money is

The real return on money is

The classical dichotomy states that

Price tags attached to goods for purchase at a store would be an example of money's role as a

Credit cards are not a form of money because

In a model with money neutrality,how much should the money supply be increased to obtain a 1% increase in real output?

Introduction

Measurement

Business Cycle Measurement

Consumer and Firm Behavior: The Work-Leisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Search and Unemployment

Economic Growth: Malthus and Solow

Income Disparity Among Countries and Endogenous Growth

A Two-Period Model: The Consumption-Savings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model with Investment

Business Cycle Models with Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking

Inflation, the Phillips Curve, and Central Bank Commitment

Filters