Macroeconomics Final Review

# Macroeconomics Final Review - Macroeconomics Final Exam...

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Macroeconomics Final Exam Review Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. B 1. When the money market is drawn with the value of money on the vertical axis, an increase in the money supply a. increases the price level and the value of money. b. increases the price level and decreases the value of money. c. decreases the price level and increases the value of money. d. decreases the price level and the value of money. Use the figure below for the following questions. Figure 30-1 A 2. Refer to Figure 30-1. When the money supply curve shifts from MS1 to MS2,

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C 3. Refer to Figure 30-1. When the money supply curve shifts from MS1 to MS2, the graph shows that B 4. Under a fractional reserve banking system, banks A 5. If the reserve ratio is 4 percent, the money multiplier is a. 25 b. 20 c. 4 d. 2 A 6. Laura puts money into a piggy bank so she can spend it later. What function of money does this illustrate? D 7. Which of the following is not included in M1? C 8. Which of the following statements is not correct?
C 9. To increase the money supply, the Fed could a. sell government bonds. b. increase the discount rate. c. decrease the reserve requirement. d. None of the above is correct. Consider the exhibit below for the following questions. Figure 33-1 A

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