Question 1

An increase in the money growth rate in the market clearing model causes:

Accepted Answer

A) a decrease in the nominal interest rate. 
B) an increase in money demand. 
C) an increase in the inflation rate. 
D) all of the above. 
A) a decrease in the nominal interest rate. 
B) an increase in money demand. 
C) an increase in the inflation rate. 
D) all of the above.

Question 2

If the price level last year was 106 and this year is 102, then the inflation rate between last period and this period was:

Accepted Answer

A) -3.8% 
B) 4%. 
C) 3.8% 
D) -3.9%. 
A) -3.8% 
B) 4%. 
C) 3.8% 
D) -3.9%.

Question 3

A decrease in the money growth rate in the market clearing model causes:

Accepted Answer

A) an increase in the nominal interest rate. 
B) a decrease in money demand. 
C) an increase in the inflation rate. 
D) all of the above. 
A) an increase in the nominal interest rate. 
B) a decrease in money demand. 
C) an increase in the inflation rate. 
D) all of the above.

Question 4

The nominal rate of interest on money is:

Accepted Answer

A) positive. 
B) real rate of return on money plus the inflation rate. 
C) minus the inflation rate. 
D) all of the above. 
A) positive. 
B) real rate of return on money plus the inflation rate. 
C) minus the inflation rate. 
D) all of the above.

Question 5

The nominal rate of interest on money is:

Accepted Answer

A) zero. 
B) real rate of return on money less the inflation rate. 
C) minus the inflation rate. 
D) all of the above. 
A) zero. 
B) real rate of return on money less the inflation rate. 
C) minus the inflation rate. 
D) all of the above.

Question 6

Real revenue from printing money is approximately:

Accepted Answer

A) the nominal interest rate times real money balances. 
B) the money growth rate times real money balances. 
C) the real interest rate times nominal money balances. 
D) the money growth rate times nominal money balances. 
A) the nominal interest rate times real money balances. 
B) the money growth rate times real money balances. 
C) the real interest rate times nominal money balances. 
D) the money growth rate times nominal money balances.

Question 7

In the market clearing model, an increase in the money growth rate leads to an increase in the inflation rate.

Accepted Answer

A) True 
 B)False

Question 8

If the expected inflation rate is 5% and the unexpected inflation rate is 4%, then the actual inflation rate is:

Accepted Answer

A) 1%. 
B) 9%. 
C) -1%. 
D) 1.25%. 
A) 1%. 
B) 9%. 
C) -1%. 
D) 1.25%.

Question 9

The real rate of interest on money is:

Accepted Answer

A) zero. 
B) the nominal rate of return on money plus the inflation rate. 
C) minus the inflation rate. 
D) all of the above. 
A) zero. 
B) the nominal rate of return on money plus the inflation rate. 
C) minus the inflation rate. 
D) all of the above.

Question 10

A decrease in the money growth rate in the market clearing model causes:

Accepted Answer

A) an increase in the nominal interest rate. 
B) an increase in money demand. 
C) an increase in the price level. 
D) all of the above. 
A) an increase in the nominal interest rate. 
B) an increase in money demand. 
C) an increase in the price level. 
D) all of the above.

Question 11

A decrease in the money growth rate in the market clearing model causes:

Accepted Answer

A) a decrease in the nominal interest rate. 
B) an increase in money demand. 
C) a decrease in the inflation rate. 
D) all of the above. 
A) a decrease in the nominal interest rate. 
B) an increase in money demand. 
C) a decrease in the inflation rate. 
D) all of the above.

Question 12

If the inflation rate is 3% and the nominal interest rate is 5% and the money growth rate increases to 5%, then we would expect the inflation rate to be:

Accepted Answer

A) 10%. 
B) 7%. 
C) 5%. 
D) 2%. 
A) 10%. 
B) 7%. 
C) 5%. 
D) 2%.

Question 13

What happens in the market clearing model when the money growth rate increases?

Accepted Answer

When the money growth rate increases, so

Question 14

If the expected inflation rate is 3% and the actual inflation rate is 5%, then the unexpected inflation rate is:

Accepted Answer

A) 2%. 
B) 8%. 
C) -2%. 
D) 1.67%. 
A) 2%. 
B) 8%. 
C) -2%. 
D) 1.67%.

Question 15

Lump sum transfers for money growth implies:

Accepted Answer

A) we need to analyze how transfer affects GDP. 
B) we do not have to analyze how households adjust their behavior to attract transfers. 
C) we need to analyze how transfers affect capital. 
D) we need to model how households adjust their behavior to attract transfers. 
A) we need to analyze how transfer affects GDP. 
B) we do not have to analyze how households adjust their behavior to attract transfers. 
C) we need to analyze how transfers affect capital. 
D) we need to model how households adjust their behavior to attract transfers.

Question 16

If the inflation rate is 3% and the nominal interest rate is 5% and the money growth rate increases to 5%, then we would expect the nominal interest rate to be:

Accepted Answer

A) 10%. 
B) 7%. 
C) zero. 
D) 2%. 
A) 10%. 
B) 7%. 
C) zero. 
D) 2%.

Question 17

The actual inflation rate is:

Accepted Answer

A) the change in the price level divided by the original price level. 
B) The original price level divided the change in price level. 
C) the original price level divided by the new price level. 
D) the new price level divided by the original price level. 
A) the change in the price level divided by the original price level. 
B) The original price level divided the change in price level. 
C) the original price level divided by the new price level. 
D) the new price level divided by the original price level.

Question 18

An increase in the money growth rate in the market clearing model causes:

Accepted Answer

A) an increase in the nominal interest rate. 
B) a decrease in money demand. 
C) an increase in the price level. 
D) all of the above. 
A) an increase in the nominal interest rate. 
B) a decrease in money demand. 
C) an increase in the price level. 
D) all of the above.

Question 19

The real rate of interest is the nominal rate of interest less the expected inflation rate.

Accepted Answer

A) True 
 B)False

Question 20

The expected rate of inflation is:

Accepted Answer

A) the real rate of interest less the nominal rate of interest. 
B) the nominal interest rate on nominal bonds less the interest rate on indexed bonds. 
C) the nominal rate of interest plus the real rate of interest. 
D) the interest rate on indexed bonds less the nominal interest rate on nominal bonds. 
A) the real rate of interest less the nominal rate of interest. 
B) the nominal interest rate on nominal bonds less the interest rate on indexed bonds. 
C) the nominal rate of interest plus the real rate of interest. 
D) the interest rate on indexed bonds less the nominal interest rate on nominal bonds.

An increase in the money growth rate in the market clearing model causes:

If the price level last year was 106 and this year is 102, then the inflation rate between last period and this period was:

A decrease in the money growth rate in the market clearing model causes:

The nominal rate of interest on money is:

The nominal rate of interest on money is:

Real revenue from printing money is approximately:

In the market clearing model, an increase in the money growth rate leads to an increase in the inflation rate.

If the expected inflation rate is 5% and the unexpected inflation rate is 4%, then the actual inflation rate is:

The real rate of interest on money is:

A decrease in the money growth rate in the market clearing model causes:

A decrease in the money growth rate in the market clearing model causes:

If the inflation rate is 3% and the nominal interest rate is 5% and the money growth rate increases to 5%, then we would expect the inflation rate to be:

What happens in the market clearing model when the money growth rate increases?

If the expected inflation rate is 3% and the actual inflation rate is 5%, then the unexpected inflation rate is:

Lump sum transfers for money growth implies:

If the inflation rate is 3% and the nominal interest rate is 5% and the money growth rate increases to 5%, then we would expect the nominal interest rate to be:

The actual inflation rate is:

An increase in the money growth rate in the market clearing model causes:

The real rate of interest is the nominal rate of interest less the expected inflation rate.

The expected rate of inflation is:

Thinking About Macroeconomics

National-Income Accounting: Gross Domestic Product and the Price Level

Introduction to Economic Growth

Working With the Solow Growth Model

Conditional Convergence and Long-Run Economic Growth

Macroeconomics Without Microeconomic Foundations

Markets, Prices, Supply, and Demand

Consumption, Saving, and Investment

An Equilibrium Business-Cycle Model

Capital Utilization and Unemployment

The Demand for Money and the Price Level

Government Expenditure

Taxes

Public Debt

Money and Business Cycles I: the Price-Misperceptions Model

Money and Business Cycles Ii: Sticky Prices and Nominal Wage Rates

World Markets in Goods and Credit

Exchange Rates

Filters

Exam 12: Inflation, Money Growth, and Interest Rates

An increase in the money growth rate in the market clearing model causes:

If the price level last year was 106 and this year is 102, then the inflation rate between last period and this period was:

A decrease in the money growth rate in the market clearing model causes:

The nominal rate of interest on money is:

The nominal rate of interest on money is:

Real revenue from printing money is approximately:

In the market clearing model, an increase in the money growth rate leads to an increase in the inflation rate.

If the expected inflation rate is 5% and the unexpected inflation rate is 4%, then the actual inflation rate is:

The real rate of interest on money is:

A decrease in the money growth rate in the market clearing model causes:

A decrease in the money growth rate in the market clearing model causes:

If the inflation rate is 3% and the nominal interest rate is 5% and the money growth rate increases to 5%, then we would expect the inflation rate to be:

What happens in the market clearing model when the money growth rate increases?

If the expected inflation rate is 3% and the actual inflation rate is 5%, then the unexpected inflation rate is:

Lump sum transfers for money growth implies:

If the inflation rate is 3% and the nominal interest rate is 5% and the money growth rate increases to 5%, then we would expect the nominal interest rate to be:

The actual inflation rate is:

An increase in the money growth rate in the market clearing model causes:

The real rate of interest is the nominal rate of interest less the expected inflation rate.

The expected rate of inflation is:

Thinking About Macroeconomics

National-Income Accounting: Gross Domestic Product and the Price Level

Introduction to Economic Growth

Working With the Solow Growth Model

Conditional Convergence and Long-Run Economic Growth

Macroeconomics Without Microeconomic Foundations

Markets, Prices, Supply, and Demand

Consumption, Saving, and Investment

An Equilibrium Business-Cycle Model

Capital Utilization and Unemployment

The Demand for Money and the Price Level

Government Expenditure

Taxes

Public Debt

Money and Business Cycles I: the Price-Misperceptions Model

Money and Business Cycles Ii: Sticky Prices and Nominal Wage Rates

World Markets in Goods and Credit

Exchange Rates

Filters