Multiple Choice Examples.docx

If there is an excess supply of money a the real

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15) If there is an excess supply of money A) The real money supply shifts left to make an equilibrium B) The interest rate rises C) The interest rate stays constant, but consumer confidence falters D) The real money supply shifts right to make an equilibrium E) The interest rate falls 16) A permanent increase in a country’s money supply 17) After a permanent decrease in the money supply 18) Under Purchasing Power Parity 19) Which of the following statements is the MOST accurate? A) Relative PPP is only valid when absolute PPP is valid, provided the factors causing deviations from relative PPP are more or less stable over time B) Absolute PPP may be valid even when relative PPP is not, provided the factors causing deviations from relative PPP are more or less stable over time C) Relative PPP may be valid even when absolute PPP is not, provided the factors causing deviations from absolute PPP are more or less stable over time D) Relative PPP may be valid even when absolute PPP is not, provided the factors causing deviations from relative PPP are more or less stable over time E) Relative PPP is not valid when absolute PPP is not 20) The monetary approach makes the general prediction that
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