Question 1

Among the source of transactions costs associated with reducing average money balances are:

Accepted Answer

A) brokerage fees. 
B) the time spent going to the bank. 
C) the time spent going to the ATM. 
D) all of the above. 
A) brokerage fees. 
B) the time spent going to the bank. 
C) the time spent going to the ATM. 
D) all of the above.

Question 2

The neutrality of money means that one time changes in the money supply do not affect real variables.

Accepted Answer

A) True 
 B)False

Question 3

High powered money is commodity money like gold and silver.

Accepted Answer

A) True 
 B)False

Question 4

Why does economizing on money balances lead to greater transactions cost?

Accepted Answer

If a household reduces its money holding

Question 5

Real money demand is:

Accepted Answer

A) money demand after taxes. 
B) a function of real GDP and the interest rate. 
C) determined by the central bank. 
D) all of the above. 
A) money demand after taxes. 
B) a function of real GDP and the interest rate. 
C) determined by the central bank. 
D) all of the above.

Question 6

When the demand of money increases, then

Accepted Answer

A) the price level rises. 
B) the price level falls. 
C) the money supply increases. 
D) the money supply decreases. 
A) the price level rises. 
B) the price level falls. 
C) the money supply increases. 
D) the money supply decreases.

Question 7

If a person's income doubles we expect their cash holding to:

Accepted Answer

A) double. 
B) more than double. 
C) less than double. 
D) decline. 
A) double. 
B) more than double. 
C) less than double. 
D) decline.

Question 8

What does money neutrality mean?

Accepted Answer

One time changes in the supply

Question 9

Money is different from other assets like capital and bonds in that:

Accepted Answer

A) money does not pay interest. 
B) money can be spent for purchases. 
C) capital and bonds are better long term stores of value. 
D) all of the above. 
A) money does not pay interest. 
B) money can be spent for purchases. 
C) capital and bonds are better long term stores of value. 
D) all of the above.

Question 10

Price level targeting implies that the monetary authority:

Accepted Answer

A) changes the money supply to match movements in money demand. 
B) changes money demand to match movements in the money supply. 
C) changes money demand and money supply to match movements in the price level. 
D) changes money demand to match movements in the price level. 
A) changes the money supply to match movements in money demand. 
B) changes money demand to match movements in the money supply. 
C) changes money demand and money supply to match movements in the price level. 
D) changes money demand to match movements in the price level.

Question 11

US M1 money includes:

Accepted Answer

A) currency held by the public. 
B) checkable deposits. 
C) traveler's checks. 
D) all of the above. 
A) currency held by the public. 
B) checkable deposits. 
C) traveler's checks. 
D) all of the above.

Question 12

Figure 10.1  
-In Figure 10.1 if the interest rate, i, were to increase, then

Accepted Answer

A) money demand decreases and the price level increases. 
B) money demand increases and the price level decreases. 
C) the money supply and the price level would increase. 
D) the money supply and the price level would decrease. 
A) money demand decreases and the price level increases. 
B) money demand increases and the price level decreases. 
C) the money supply and the price level would increase. 
D) the money supply and the price level would decrease.

Question 13

Money is different from other assets like capital and bonds in that:

Accepted Answer

A) money pays a higher interest rate. 
B) money can be spent for purchases. 
C) money is a better long term store of value. 
D) all of the above. 
A) money pays a higher interest rate. 
B) money can be spent for purchases. 
C) money is a better long term store of value. 
D) all of the above.

Question 14

Commodity money is money that has value because:

Accepted Answer

A) of the intrinsic value of the commodity. 
B) it is legal tender. 
C) the government says so. 
D) all of the above. 
A) of the intrinsic value of the commodity. 
B) it is legal tender. 
C) the government says so. 
D) all of the above.

Question 15

Among the source of transactions costs associated with reducing average money balances are:

Accepted Answer

A) foregone interest payments. 
B) the time spent going to the bank or ATM. 
C) opportunity costs. 
D) all of the above. 
A) foregone interest payments. 
B) the time spent going to the bank or ATM. 
C) opportunity costs. 
D) all of the above.

Question 16

A monetary aggregate is:

Accepted Answer

A) high powered money. 
B) commodity money. 
C) money defined more broadly than currency. 
D) total currency in circulation plus depository institutions deposits at the central bank. 
A) high powered money. 
B) commodity money. 
C) money defined more broadly than currency. 
D) total currency in circulation plus depository institutions deposits at the central bank.

Question 17

If the money supply grows faster than money demand, then the price level rises.

Accepted Answer

A) True 
 B)False

Question 18

Figure 10.1  
-In Figure 10.1 if money demand increases faster than the money supply then:

Accepted Answer

A) the price level will rise over time. 
B) the price level will fall over time. 
C) GDP will rise over time. 
D) GDP will fall over time. 
A) the price level will rise over time. 
B) the price level will fall over time. 
C) GDP will rise over time. 
D) GDP will fall over time.

Question 19

If a person holds one dollar and does not lose it, then as long as the person holds that dollar they will have:

Accepted Answer

A) the commodity value of the dollar. 
B) one dollar in currency. 
C) an interest bearing asset. 
D) all of the above. 
A) the commodity value of the dollar. 
B) one dollar in currency. 
C) an interest bearing asset. 
D) all of the above.

Question 20

When the supply of money increases, then

Accepted Answer

A) the price level rises. 
B) the price level falls. 
C) money demand increases. 
D) money demand decreases. 
A) the price level rises. 
B) the price level falls. 
C) money demand increases. 
D) money demand decreases.

Among the source of transactions costs associated with reducing average money balances are:

The neutrality of money means that one time changes in the money supply do not affect real variables.

High powered money is commodity money like gold and silver.

Why does economizing on money balances lead to greater transactions cost?

Real money demand is:

When the demand of money increases, then

If a person's income doubles we expect their cash holding to:

What does money neutrality mean?

Money is different from other assets like capital and bonds in that:

Price level targeting implies that the monetary authority:

US M1 money includes:

Figure 10.1 -In Figure 10.1 if the interest rate, i, were to increase, then

Money is different from other assets like capital and bonds in that:

Commodity money is money that has value because:

Among the source of transactions costs associated with reducing average money balances are:

A monetary aggregate is:

If the money supply grows faster than money demand, then the price level rises.

Figure 10.1 -In Figure 10.1 if money demand increases faster than the money supply then:

If a person holds one dollar and does not lose it, then as long as the person holds that dollar they will have:

When the supply of money increases, then

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

Inflation, Money Growth, and Interest Rates

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 11: The Demand for Money and the Price Level

Among the source of transactions costs associated with reducing average money balances are:

The neutrality of money means that one time changes in the money supply do not affect real variables.

High powered money is commodity money like gold and silver.

Why does economizing on money balances lead to greater transactions cost?

Real money demand is:

When the demand of money increases, then

If a person's income doubles we expect their cash holding to:

What does money neutrality mean?

Money is different from other assets like capital and bonds in that:

Price level targeting implies that the monetary authority:

US M1 money includes:

Figure 10.1 -In Figure 10.1 if the interest rate, i, were to increase, then

Money is different from other assets like capital and bonds in that:

Commodity money is money that has value because:

Among the source of transactions costs associated with reducing average money balances are:

A monetary aggregate is:

If the money supply grows faster than money demand, then the price level rises.

Figure 10.1 -In Figure 10.1 if money demand increases faster than the money supply then:

If a person holds one dollar and does not lose it, then as long as the person holds that dollar they will have:

When the supply of money increases, then

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

Inflation, Money Growth, and Interest Rates

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