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%? a) 1.25% b) 7.50% c) 6.25% d) 5.00% 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 a) 1.54. b) 0.75. c) 1.33. d) 0.65. 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 a) 3 b) 1 c) 4/3 d) 3/4 6. The trough of a business cycle occurs when ________ hits its lowest point. a) inflation. b) the unemployment rate. c) aggregate economic activity. d)
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This note was uploaded on 05/05/2010 for the course COM 4123 taught by Professor Ted during the Spring '10 term at SUNY Albany.

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

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