Exam 24: Money, the Price Level, and Inflation

In a world with no money,costs are expressed in terms of other goods.If one video game costs two hamburgers,and a hamburger costs three pops,how many pops would it take to buy a video game?

Excess reserves are

Which of the following statements about depository institutions is false?

Choose the statement that is incorrect.

In the United Kingdom,the currency drain ratio is 0.38 and the desired reserve ratio is 0.002. The U.K.money multilier is

Use the figure below to answer the following questions. Figure 24.4.2 -Refer to Figure 24.4.2.Which one of the following best describes the response to a rise in the price level?

Real GDP is $2,560 billion,the quantity of money $800 billion,and the velocity of circulation is 4.The price level is

Suppose that a country has $50 billion in bank reserves,$100 billion in currency held by the public,and $500 billion in bank deposits.The currency drain ratio is

Barter can only take place if there is

The Monetary Base consists of the sum of

During a period of severe inflation,which function of money is most seriously affected?

If households and firms find they are holding less money than desired,they will

The amount of real money people want to hold will decrease if either ________ or the interest rate ________.

Which one of the following is a component of M2 but not of M1?

The opportunity cost of holding currency is

If the desired reserve ratio is 3 percent and deposits totaled $5.75 billion,banks hold

Real GDP is $2,000 billion,the price level is 120,and the velocity of circulation is 5.Nominal GDP is

The reserves of a bank include

The Canadian money multiplier is calculated as the

Use the table below to answer the following questions. Table 24.4.1 -Refer to Table 24.4.1.The spreadsheet provides information about the demand for money in Minland. Column A is the nominal interest rate,r.Columns B and C show the quantity of money demanded at two different levels of real GDP: Y? is $10 billion and Y? is $20 billion. The quantity of money is $3 billion.Real GDP is $20 billion. If the interest rate is greater than 4 percent a year