Exam 11: The Monetary System

Assuming all else equal,what is likely to happen to the demand curve for reserves in an economy if the economy goes through a period of rapid expansion?

Which of the following constitutes monetary policy as performed by the Federal Reserve?

M2 adds together ________.

If the nominal interest rate in an economy is 6 percent and the inflation rate in the economy is 10 percent,then the real interest rate is ________.

The German hyperinflation during 1922-1923 can be attributed to the ________.

Jane got paid in cash for a programming job.Jane didn't need to buy anything that week,but put the money in her purse to use when she needed it.Jane was using the money as a ________.

Scenario: An economy produces only cell phones. In 2015, the economy manufactured 275 cell phones, and each cell phone sold for $200. In 2016, the economy manufactured 280 cell phones, but the price of each cell phone fell to $180. -Refer to the scenario above.Using 2015 as the base year,what was the real GDP of the economy in 2015?

Which of the following statements is true?

The Federal Reserve can influence the federal funds rate by shifting ________.

When Terry retired from Caterpillar,he received a pension: Caterpillar would pay him $50,000 the first year he was retired,with the amount increasing by 5 percent each year thereafter.If inflation turned out to be 2 percent each year,what would happen to the real value of Terry's pension?

One of the main reasons for hyperinflation episodes is ________.

Which of the following statements is true of the quantity theory of money?

Which of the following equations correctly links the growth rate of nominal GDP,the growth rate of real GDP,and the inflation rate?

Consider an economy over the years 2008 and 2009.The output in the economy remained constant over these two years,but the prices of all goods and services halved.In such a situation,________.

According to the quantity theory of money,if the growth rate of money supply is 6 percent and the growth rate of real GDP is 9 percent,then the growth rate of nominal GDP in the economy will be ________.

If the Fed sells government bonds in the open market,it will cause ________.

In an economy,if the money supply is $100,000,currency in circulation is $50,000,amount in savings accounts is $18,000,amount in travelers' checks is $12,000,and the amount in money market accounts is $9,000,then what is the amount held in checking accounts in the economy?

What are open market operations? If the economy is experiencing a recession,what kind of open market operations should the Fed undertake?

Consider an economy where the growth rate of real GDP is 6 percent and the growth rate of money supply is 8 percent.If the quantity theory of money holds,the inflation rate in the economy will be ________.

A bank is said to have enough liquidity if ________.