Econ Study Guide Ch.20

Descrição

Economics study guide
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Resumo de Recurso

Questão 1

Questão
The demand for money that households keep for emergency purposes is known as-
Responda
  • precautionary demand
  • emergency demand
  • speculative demand
  • temporary demand

Questão 2

Questão
The quantity of money held in response to interest rates is the-
Responda
  • transactions motive for holding money
  • precautionary motive for holding money
  • speculative motive for holding money
  • unit-of-account motive for holding money

Questão 3

Questão
the specualtive demand for money
Responda
  • varies inversely with income
  • is only concerned with active money
  • involves holding money for unexpected problems
  • varies directly with the transactions demand for money
  • varies inversely with the interest rate

Questão 4

Questão
Other things being equal, the quantity of money that people wish to hold can be expected to -
Responda
  • increase as the interest rate increases
  • decrease as the interest rate increases
  • decrease as real GDP increases
  • none of the answers above are correct

Questão 5

Questão
A decrease in the interest rate, other things being equal, causes a(n)-
Responda
  • upward movement along the demand curve for money
  • downward movement along the demand curve for money
  • rightward shift of the demand curve for money
  • leftward shift of the demand curve for money

Questão 6

Questão
Which of the following statements is true?
Responda
  • The speculative demand for money at possible interest rates gives the demand for money curve its upward slope
  • there is an inverse relationship between the quantity of money demanded and the interest rate
  • according to the quantity theory of money, any change in the money supply will have no effect on the price level
  • all of the answers above are correct

Questão 7

Questão
In exhibit 20-11, assume an equilibrium with an interest rate of 6% and the money supply at $400 billion. The fed uses its policy tools to move the economy to a new equilibrium at E2, with money supply of $600 billion and an interest rate of 4%. This change could be the result of a(n)-
Responda
  • open market sale of securities by the fed
  • higher discount rate set by the fed
  • higher required-reserve ratio set by the Fed
  • open market purchase of securities by the fed

Questão 8

Questão
according to Keynesians, an increase in the money supply will-
Responda
  • decrease the interest rate, and increase investment, aggregate demand, prices, real GDP, and employment.
  • decrease the interest rate, and decrease investment, aggregate demand, prices, real GDP. and employment.
  • increase the interest rate, and decrease investment, aggregate demand, prices, real GDP, and employment
  • only increase prices

Questão 9

Questão
In Exhibit 20-12 , when the money supply increases from MS1 to MS2, the equilibrium interest rate-
Responda
  • remains unchanged
  • increases from i1 to i2, increasing investment spending from I1 to I2
  • increases from i2 to i1, decreasing investment spending from I2 to I1
  • decreases from i1 to i2, increasing investment spending from I1 to I2

Questão 10

Questão
In exhibit 20-12, a shift in aggregate demand from AD1 to AD2
Responda
  • cannot raise real GDP because the economy is at full employment
  • cannot raise real GDP because the aggregate supply curve is upward sloping at GDP2
  • will raise real GDP because the economy is operating below the full-employment level
  • will cause the interest rate to increase from i2 to i1

Questão 11

Questão
The transactions demand for money is the demand for money by households for
Responda
  • rainy day spending
  • predictable spending purposes
  • liquidity purposes
  • investing purposes

Questão 12

Questão
People react to an excess supply of money by-
Responda
  • selling bonds, thus driving up the interest rate
  • selling bonds, thus driving down the interest rate
  • buying bonds, thus driving up the interest rate
  • buying bonds, thus driving down the interest rate

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