hw19 answer

hw19 answer - Money and Banking Homework for Chapter 19...

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Money and Banking Homework for Chapter 19 Instructor: Lili cai 07/11/07 MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The equation of exchange states that the quantity of money multiplied by the number of times this money is spent in a given year must equal 1) _______ A) velocity. B) nominal income. C) real income. D) real gross national product. 2) The average number of times that a dollar is spent in buying the total amount of final goods and services produced during a given time period is known as 2) _______ A) the spending multiplier. B) the money multiplier. C) velocity. D) gross national product. 3) In the Baumol-Tobin analysis of transactions demand for money, either an increase in _____ or a decrease in _____ increases money demand. 3) _______ A) income; interest rate B) income; brokerage fee C) interest rates; brokerage fee D) interest rate; income E) brokerage fee; income 4) The Keynesian theory of money demand emphasizes the importance of 4) _______ A) interest rates on the demand for money. B) irrational behavior on the part of some economic agents. C) a constant velocity. D) all of the above. 5) For the classical economists, the quantity theory of money provided an explanation of movements in the price level. Movements in the price level result 5) _______ A) from changes in factors other than the quantity of money. B) only partially from changes in the quantity of money.
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hw19 answer - Money and Banking Homework for Chapter 19...

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