ECON_120_chap_14_test_ans

ECON_120_chap_14_test_ans - < Your location: Assessments...

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Unformatted text preview: < Your location: Assessments > View f—‘ill Submissions > View attempt December 6, 2009 10:59 PM View Attempt 1 of 1 Title: Ch 14 Quiz Started: Submitted: Time spent: 00:15:06 Total score: DDI'IB Refer to the figure below. December 6, 2009 11:14 PM BIS = 60% Total score adjusted by 0.0 Maximum possible score: 5 IWhy is the demand for money curye downward sloping? [L U: C . Score: \-1.-n.-1 Student Value Response . Because as interest rates decrease, the opportunity cost of holding money decreases, and the public will demand more money. . Because as 0% 'nterest rates decrease, :he cost of holding money for :ransaction ourposes increases, and the public will demand ess money. Because the cost of "iolding money rises as :he quantity of money demanded increases. . BECEILJSE low interest rates mean money earns very little interest and people want less of it. 0,-‘1 Correct answer Ci Feedback Incorrect. This describes a positiye relationship. The demand for money curye downward sloping. When will the Fed sell government bends? Student Value Correct answer Feedback Response A. Never. B. When it wants to speed up, or stimulate the economy. . When it 100% 5 Correct. If the Federal Reserve wishes to increase the money wants to supply to stimulate the economy, it buys government bonds. To slow the decrease the money supply to slow the economy down, the Fed economy sells government bonds. down. D. When it wants to increase the money supply. Score: 1,-‘1 LL 0 Refer to the figure below. Which graph correctly depicts an open market sale by the Fed? n" ul‘ u.‘ li' Illlx'l'L'Vl mm IILInL “II x .ll' .fi Fl Mnnm \-I--n.'_\ Student Value Correct Answer Feedback Response a. The graph on the left. 3 B. The graph 100% 5 Correct. An open market sale shifts the supply of money to the on the left and leads to higher interest rates. right. C. Both graphs. 0. Neither graph. Score: 1,-‘1 If the Fed wants to keep the interest rate constant, it will have to: Student Value Correct Answer Feedback Response A. Increase E the money suppw when the demand for money increases. B. Increase the money supply when the demand for money decreases. C. Leave the 0% Incorrect. The interest rate would fluctuate freely if money supply money did not change with changes in the demand for money. suppw unchanged regardless of changes in the Hnmnnrl Fnr it: Score: Lower interest rates brought on by the Fed will cause the dollar to [L U Score: Dune uplllullu nu. money. . Decrease the reserve requirement when the demand for money shifts to the left. on than foreign goods. Student Response . appreciate; more expensive . appreciate; cheaper . depreciate; more expensive . depreciate; cheaper 1n Value 100% Correct Answer .This will make U.S. goods Feedback Correct. Lower interest rates brought on by the Fed will cause the dollar to depreciate. This will ultimately change the demand and supply of goods and services around the globe because it will make U.S. goods cheaper than foreign goods. ...
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This note was uploaded on 12/14/2009 for the course ECON 81509 taught by Professor X.song during the Spring '09 term at Mesa CC.

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ECON_120_chap_14_test_ans - < Your location: Assessments...

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