Correct! Correct! transactions motive for holding money. 1 / 1 pts Question 35 An increase in the supply of money will lead to ____ in equilibrium real GDP and ____ in equilibrium price level. an increase; an increase Correct! Correct! an increase; a decrease a decreases; an increase a decrease; a decrease 0 / 1 pts Question 36 Assume a fixed demand for money curve and the Fed increases the money supply. In response, people will: sell bonds, thus driving up the interest rate. You Answered You Answered sell bonds, thus driving down the interest rate. buy bonds, thus driving up the interest rate. buy bonds, thus driving down the interest rate. Correct Answer Correct Answer
1 / 1 pts Question 37 If the Federal Reserve increases the money supply, ceteris paribus , the: rate of interest decreases. Correct! rate of interest increases. rate of interest is una ff ected. Fed sells bonds. 1 / 1 pts Question 38 The demand for money that households keep for emergency purposes is known as the: precautionary demand. Correct! emergency demand. speculative demand. transactions demand. temporary demand. 1 / 1 pts Question 39 The speculative demand curve for money is: downward sloping. Correct! upward sloping. vertical.
horizontal. spiral. 1 / 1 pts Question 40 Exhibit 16-4 Aggregate demand and supply model In Exhibit 16-4, which one of the following actions could the Fed use to shift the AD curve from AD to AD ? 3 2 Lower the legal reserve requirement. Lower the discount rate. Lower the federal funds rate. Sell government securities. Correct! Print currency. 1 / 1 pts Question 41 When the Fed increases the money supply, interest rates:
rise. fall. Correct! are una ff ected. rise and then fall. fall and then rise. 0 / 1 pts Question 42 In a two-asset economy with money and T-bills, the quantity of money that people will want to hold, other things being equal, can be expected to: decrease as real GDP increases. You Answered You Answered increase as the interest rate decreases. Correct Answer Correct Answer increase as the interest rate increases. all of these. 1 / 1 pts Question 43 According to monetarists, which of the following would be most important for the control of inflation? a steady increase in federal expenditures the imposition of price controls keeping the growth rate of the money supply low and steady Correct! Correct! a steady increase in the size of the budget deficit
1 / 1 pts Question 44 Which of the following is a belief of the monetarists? They think the Great Depression was made worse by poor conduct of monetary policy. They do not believe monetary policy is transmitted to the economy only through its e ff ect on interest rates and planned investment. They believe that the interest-investment curve is vertical. All of these. Correct! Correct! 1 / 1 pts Question 45 In Keynes's view, an excess quantity of money demanded causes people to: sell bonds and the interest rate rises.
- Spring '12
- 2000s American television series, Mark Cramer