Question 1

The double coincidence of wants problem is solved by

Accepted Answer

A) government intervention. 
B) specialization. 
C) monetary aggregates. 
D) credit markets. 
E) the use of money. 
A) government intervention. 
B) specialization. 
C) monetary aggregates. 
D) credit markets. 
E) the use of money.

Question 2

Price tags attached to goods for purchase at a store would be an example of money's role as a

Accepted Answer

A) medium of exchange. 
B) store of value. 
C) unit of account. 
D) store of wealth. 
E) standard of deferred payment. 
A) medium of exchange. 
B) store of value. 
C) unit of account. 
D) store of wealth. 
E) standard of deferred payment.

Question 3

The real interest rate is approximately equal to

Accepted Answer

A) the nominal interest rate minus the inflation rate. 
B) one divided by the nominal interest rate minus the inflation rate. 
C) the growth in real GDP. 
D) the nominal interest rate. 
E) the nominal interest rate plus the inflation rate. 
A) the nominal interest rate minus the inflation rate. 
B) one divided by the nominal interest rate minus the inflation rate. 
C) the growth in real GDP. 
D) the nominal interest rate. 
E) the nominal interest rate plus the inflation rate.

Question 4

In the monetary intertemporal model, the supply of money is determined by

Accepted Answer

A) the sale of bonds by the chartered banks. 
B) the Bank of Canada. 
C) foreign capital flows. 
D) private sector transactions. 
E) the government merged with the Bank of Canada. 
A) the sale of bonds by the chartered banks. 
B) the Bank of Canada. 
C) foreign capital flows. 
D) private sector transactions. 
E) the government merged with the Bank of Canada.

Question 5

The nominal money supply is

Accepted Answer

A) horizontal at P*. 
B) horizontal at M. 
C) determined by the market for goods. 
D) determined by equilibrium in the market for credit card balances. 
E) exogenous. 
A) horizontal at P*. 
B) horizontal at M. 
C) determined by the market for goods. 
D) determined by equilibrium in the market for credit card balances. 
E) exogenous.

Question 6

Which of the following is an example of the role of banks?

Accepted Answer

A) help control the amount of currency in circulation 
B) financial intermediaries 
C) manage stock portfolios 
D) manage the money supply 
E) create money 
A) help control the amount of currency in circulation 
B) financial intermediaries 
C) manage stock portfolios 
D) manage the money supply 
E) create money

Question 7

Money supply targeting

Accepted Answer

A) is superior to nominal interest rate targeting in maintaining price stability. 
B) performs poorly. 
C) is very successful in maintaining price stability. 
D) is used by most monetary authorities today. 
E) will result in a high rate of inflation. 
A) is superior to nominal interest rate targeting in maintaining price stability. 
B) performs poorly. 
C) is very successful in maintaining price stability. 
D) is used by most monetary authorities today. 
E) will result in a high rate of inflation.

Question 8

Double coincidence of wants means

Accepted Answer

A) two economic agents want different sets of goods. 
B) households want more of leisure and consumption. 
C) two economic agents want to exchange the goods they have. 
D) households prefer to double the quantity of their goods. 
E) households prefer a diverse set of goods. 
A) two economic agents want different sets of goods. 
B) households want more of leisure and consumption. 
C) two economic agents want to exchange the goods they have. 
D) households prefer to double the quantity of their goods. 
E) households prefer a diverse set of goods.

Question 9

Use of money to save up for a future cash purchase would be an example of money's role as a

Accepted Answer

A) medium of exchange. 
B) store of value. 
C) unit of account. 
D) store of wealth. 
E) standard of deferred payment. 
A) medium of exchange. 
B) store of value. 
C) unit of account. 
D) store of wealth. 
E) standard of deferred payment.

Question 10

The demand for money is determined by

Accepted Answer

A) the behaviour of the private sector. 
B) the behaviour of the consumer and the firm. 
C) the behaviour of the government. 
D) the behaviour of the chartered banks. 
E) the behaviour of the Bank of Canada. 
A) the behaviour of the private sector. 
B) the behaviour of the consumer and the firm. 
C) the behaviour of the government. 
D) the behaviour of the chartered banks. 
E) the behaviour of the Bank of Canada.

Question 11

Fiat money is

Accepted Answer

A) currency found in Europe. 
B) Canadian currency in Canada. 
C) commodity-based paper money. 
D) money in chartered banks. 
E) commodity money. 
A) currency found in Europe. 
B) Canadian currency in Canada. 
C) commodity-based paper money. 
D) money in chartered banks. 
E) commodity money.

Question 12

In a corridor system, if the excess demand for reserves is zero when the overnight interest rate is lower than the central bank's target

Accepted Answer

A) the central bank should borrow to achieve its target. 
B) the corridor system is not working. 
C) the central bank should impose a reserve requirement. 
D) the central bank should increase its deposit rate. 
E) the central bank should lend to achieve its target. 
A) the central bank should borrow to achieve its target. 
B) the corridor system is not working. 
C) the central bank should impose a reserve requirement. 
D) the central bank should increase its deposit rate. 
E) the central bank should lend to achieve its target.

Question 13

The inflation tax is

Accepted Answer

A) a tax on nominal goods. 
B) the sales tax. 
C) a tax introduced in the early 1980s to fight inflation. 
D) the revenue from open market purchases. 
E) the revenue from seigniorage. 
A) a tax on nominal goods. 
B) the sales tax. 
C) a tax introduced in the early 1980s to fight inflation. 
D) the revenue from open market purchases. 
E) the revenue from seigniorage.

Question 14

The two most common types of money in circulation in Canada today consist of

Accepted Answer

A) transaction deposits at banks and commodity money. 
B) fiat money and transaction deposits at banks. 
C) commodity-backed paper currency and fiat money. 
D) private bank notes and commodity money. 
E) private bank notes and commodity-backed paper currency. 
A) transaction deposits at banks and commodity money. 
B) fiat money and transaction deposits at banks. 
C) commodity-backed paper currency and fiat money. 
D) private bank notes and commodity money. 
E) private bank notes and commodity-backed paper currency.

Question 15

The marginal cost of financial transactions rises with the volume of financial transactions due to

Accepted Answer

A) congestion. 
B) power failure. 
C) bank failure. 
D) reserve requirements. 
E) perceived instability of banks. 
A) congestion. 
B) power failure. 
C) bank failure. 
D) reserve requirements. 
E) perceived instability of banks.

Question 16

Which of the following approximately describes the relationship between the nominal and real interest rate?

Accepted Answer

A)  $R \approx r - i$ 
B)  $r \approx R - i$ 
C)  $r - R \approx i$ 
D)  $r \approx R + i$ 
E)  $R \approx r + \frac { i } { 2 }$ 
A)  $R \approx r - i$ 
B)  $r \approx R - i$ 
C)  $r - R \approx i$ 
D)  $r \approx R + i$ 
E)  $R \approx r + \frac { i } { 2 }$

Question 17

The excess demand for overnight funds is

Accepted Answer

A) perfectly elastic. 
B) decreasing with the overnight interest rate. 
C) perfectly inelastic. 
D) zero. 
E) increasing with the overnight interest rate. 
A) perfectly elastic. 
B) decreasing with the overnight interest rate. 
C) perfectly inelastic. 
D) zero. 
E) increasing with the overnight interest rate.

Question 18

The monetary base includes

Accepted Answer

A) M0 and M1. 
B) inside money. 
C) all money available outside of the financial system. 
D) money drawn from credit cards. 
E) currency outside banks only. 
A) M0 and M1. 
B) inside money. 
C) all money available outside of the financial system. 
D) money drawn from credit cards. 
E) currency outside banks only.

Question 19

Central banks in the world are increasingly experimenting with unconventional monetary policies. Describe
two types of unconventional monetary policies, and discuss why these policies may or may not work.

Accepted Answer

Two types of unconventional monetary pol

Question 20

If the nominal interest rate rises

Accepted Answer

A) consumers and firms are less inclined to use credit cards. 
B) there is substantial inflation in the economy. 
C) inflation is declining. 
D) real interest rates are declining. 
E) the opportunity cost of holding cash rises. 
A) consumers and firms are less inclined to use credit cards. 
B) there is substantial inflation in the economy. 
C) inflation is declining. 
D) real interest rates are declining. 
E) the opportunity cost of holding cash rises.

The double coincidence of wants problem is solved by

Price tags attached to goods for purchase at a store would be an example of money's role as a

The real interest rate is approximately equal to

In the monetary intertemporal model, the supply of money is determined by

The nominal money supply is

Which of the following is an example of the role of banks?

Money supply targeting

Double coincidence of wants means

Use of money to save up for a future cash purchase would be an example of money's role as a

The demand for money is determined by

Fiat money is

In a corridor system, if the excess demand for reserves is zero when the overnight interest rate is lower than the central bank's target

The inflation tax is

The two most common types of money in circulation in Canada today consist of

The marginal cost of financial transactions rises with the volume of financial transactions due to

Which of the following approximately describes the relationship between the nominal and real interest rate?

The excess demand for overnight funds is

The monetary base includes

Central banks in the world are increasingly experimenting with unconventional monetary policies. Describe two types of unconventional monetary policies, and discuss why these policies may or may not work.

If the nominal interest rate rises

Introduction

Measurement

Business Cycle Measurement

Consumer and Firm Behavior: the Workleisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Search and Unemployment

Economic Growth: Malthus and Solow

Income Disparity Among Countries and Endogenous Growth

A Two-Period Model: the Consumptionsavings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model With Investment

Business Cycle Models With Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

Inflation: Phillips Curves and Neo-Fisherism

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking: a Deeper Look

Filters

Exam 12: Money, Banking, Prices, and Monetary Policy

The double coincidence of wants problem is solved by

Price tags attached to goods for purchase at a store would be an example of money's role as a

The real interest rate is approximately equal to

In the monetary intertemporal model, the supply of money is determined by

The nominal money supply is

Which of the following is an example of the role of banks?

Money supply targeting

Double coincidence of wants means

Use of money to save up for a future cash purchase would be an example of money's role as a

The demand for money is determined by

Fiat money is

In a corridor system, if the excess demand for reserves is zero when the overnight interest rate is lower than the central bank's target

The inflation tax is

The two most common types of money in circulation in Canada today consist of

The marginal cost of financial transactions rises with the volume of financial transactions due to

Which of the following approximately describes the relationship between the nominal and real interest rate?

The excess demand for overnight funds is

The monetary base includes

Central banks in the world are increasingly experimenting with unconventional monetary policies. Describe two types of unconventional monetary policies, and discuss why these policies may or may not work.

If the nominal interest rate rises

Introduction

Measurement

Business Cycle Measurement

Consumer and Firm Behavior: the Workleisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Search and Unemployment

Economic Growth: Malthus and Solow

Income Disparity Among Countries and Endogenous Growth

A Two-Period Model: the Consumptionsavings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model With Investment

Business Cycle Models With Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

Inflation: Phillips Curves and Neo-Fisherism

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking: a Deeper Look

Filters