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midivquestions - Fall 2010 Professor Ulu Temple University,...

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Fall 2010 Professor Ulu Temple University, Econ 1101, Midterm Name___________________________________ ID#:___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The functions of money are 1) _______ A) medium of exchange, unit of account, and store of value. B) medium of exchange and the ability to buy goods and services. C) pricing, contracts, and means of payment. D) medium of exchange, unit of account, and means of payment. 2) Checks are 2) _______ A) not money, but credit cards are. B) money, as are credit cards. C) not money, and neither are credit cards. D) money, but credit cards are not. 3) Which of the following equations represents the equation of exchange? 3) _______ A) M = VP/Y B) MY = PV C) PM = VY D) MV = PY 4) The quantity theory of money predicts that 4) _______ A) in the short run, a 10 percent increase in the quantity of money leads to a 10 percent increase in velocity. B) in the long run a 10 percent increase in the quantity of money leads to a 10 percent increase in the price level. C) in the long run, a 10 percent increase in the quantity of money leads to a 10 percent increase in velocity. D) in the long run, a 10 percent increase in the quantity of money leads to a 10 percent increase in real GDP. 5) Nominal GDP, PY , is $7.5 trillion. The quantity of money is $3 trillion. The velocity of circulation is 5) _______ A) 22.5. B) 10.5. C) 3. D) 2.5.
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6) In the above figure, suppose the economy is initially on the demand for money curve MD 1 . What is the effect of a fall in the interest rate? 6) _______
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This note was uploaded on 04/12/2011 for the course ECON 1101 taught by Professor Rappoport during the Spring '08 term at Temple.

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midivquestions - Fall 2010 Professor Ulu Temple University,...

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