Exam 8: Money, the Price Level, and Inflation

An increase in the opportunity cost of holding money creates a ________ the money demand curve and an increase in real GDP creates a ________ the money demand curve.

When part of the quantity of money is held in currency, then

Checks that people write are

If real GDP is $10 trillion and the velocity of circulation is 2, the quantity of money

How do banks create liquidity?

When the Fed is ________ it is ________.

-In the above figure, if the interest rate is 8 percent

-In the above figure, suppose the economy is initially on the demand for money curve MD?. What is the effect of an increase in real GDP?

Modern U.S. commercial banks perform all of the following functions EXCEPT

-In the balance sheet for the FBN bank above, the entries are in millions of dollars. If the desired reserve ratio equals 10 percent, FBN Bank has excess reserves of

The monetary base is

Which of the following is money?

Depository institutions undertake all the following activities EXCEPT they do not ________.

Changing which of the following is a Federal Reserve monetary policy tool?

The higher the nominal interest rate, the

If you hold $25 in cash, have $150 in a checking account, and have $250 in a savings account, how much of M2 do you have?

Which of the following is NOT included in M1?

The equation of exchange becomes the same as the quantity theory of money by assuming that the velocity of circulation ________ when the quantity of money changes and potential GDP ________ when the quantity of money changes.

Depository institutions do all the following EXCEPT

________ real GDP increases the demand for money and ________ the nominal interest rate decreases the quantity of money demanded.