practicequestions8spring2004

practicequestions8spring2004 - Economics 102 Spring 2004...

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Economics 102 Spring 2004 Practice Questions 8 1. The demand for money a. is the same as the demand for bonds. b. is the same as the supply for bonds. c. increases whenever the price level falls. d. Increases whenever aggregate income increases. e. shows that people always demand as much money as possible 2. Which of the following would be most likely to increase the quantity of money demanded (i.e., to cause a movement along a money demand curve)? a. a decrease in real income b. an increase in real income c. a decrease in the interest rate d. an increase in the cost of converting other assets into money e. an increase in the price level 3. In the short-run macro model, an open market purchase of bonds by the Fed will a. raise the interest rate, reduce spending, and increase output. b. raise the interest rate, reduce spending, and decrease output. c. lower the interest rate, reduce spending, and decrease output. d. lower the interest rate, increase spending, and decrease output. e. lower the interest rate, increase spending, and increase output. 4. Which of the following would lead to a rightward movement along a stationary demand for money curve? a. a decrease in the interest rate b. a decrease in the price level c. an increase in the interest rate d. an increase in the price level e. an increase in real income 5. The aggregate demand curve is derived using a. the sum of market demand curves from all industries. b. product market demand curves and money market equilibrium. c. product market demand curves and the short-run Keynesian aggregate expenditure model. d. the short-run Keynesian aggregate expenditure model only. e. the short-run Keynesian aggregate model and money market equilibrium. 6.
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practicequestions8spring2004 - Economics 102 Spring 2004...

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