{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

homework solution 2

# homework solution 2 - Econ 716-21 Macroeconomics for...

This preview shows pages 1–2. Sign up to view the full content.

1 Econ 716-21 Macroeconomics for Finance Lau Problem Set II Fall 2010 Instructions: 1. Answer all questions. 2. Please form study group of up to 3 persons and work on the problem set. 3. Show your formulas and steps clearly. 4. Due date: 11/1/2010 (M) @8am Part I Multiple Choice: (36 points; 3 points each) 1. People use money as a store of value when they A. hold money to transfer purchasing power into the future. B. use money as a measure of economics transactions. C. use money to buy goods and services. D. hold money to gain power and esteem. 2. In a country on a gold standard, the quantity of money is determined by the A. government B. central bank C. amount of gold D. buying and selling of government securities. 3. Credit cards A. are part of the M1 money supply. B. are part of the M2 money supply. C. are part of the M1 and M2 money supply. D. may affect the demand for money. 4. If the money supply increases 12 percent, velocity decreases 4 percent, and the price level increases 5 percent, then the change in real GDP must be: A. 3 percent. B. 4 percent. C. 9 percent. D. 11 percent. 5. If the Fed announces that it will decrease the money supply in the future but does not change the money supply today: A. both the nominal interest rate and the current price level will decrease. B. the nominal interest rate will increase and the current price level will decrease. C. the nominal interest rate will decrease and the current price level will increase.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 5

homework solution 2 - Econ 716-21 Macroeconomics for...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online