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Samplequestionsexam3

# Samplequestionsexam3 - 1 2 3 4 5 Sample Final exam For...

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Sample Final exam 1. For something to satisfy the medium-of-exchange function of money, it must be a) backed by gold. b) an inherently valuable commodity. c) issued by a central bank. d) readily exchangeable for other goods. 2. Which of the following is most likely to lead to a decrease of 10% in the nominal demand for money? a) An increase in real income of 5% b) An increase of 10% in the price level c) A decline of 10% in the price level d) A decrease in real income of 5% 3. If the income elasticity of money demand is 3/4 and the interest elasticity of money demand is -1/4, by what percent does money demand rise if income rises 10% and the nominal interest rate rises from 4% to 5%? 4. Money demand is given by M d / P = 1000 + .2 Y - 1000 i Given that P = 200, Y = 2000, and i = .10, velocity is equal to 5. Suppose real money demand is 1. L   =  0.8  Y   -  100,000 ( +   π   e ). If the nominal money supply is 12,000, real output is 15,000, the real interest rate is .02, and the expected inflation rate is .01, then the price level is 6. The trough of a business cycle occurs when ________ hits its lowest point. a) inflation. b) the unemployment rate. c) aggregate economic activity. d) the money supply

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Samplequestionsexam3 - 1 2 3 4 5 Sample Final exam For...

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