Question 1

Real money demand depends

Accepted Answer

A)  positively on the inflation rate. 
B)  positively on the consumer's savings rate. 
C)  positively on the nominal interest rate. 
D)  negatively on the inflation rate. 
E)  negatively on the nominal interest rate. 
A)  positively on the inflation rate. 
B)  positively on the consumer's savings rate. 
C)  positively on the nominal interest rate. 
D)  negatively on the inflation rate. 
E)  negatively on the nominal interest rate.

Question 2

In the monetary intertemporal model,changing M

Accepted Answer

A)  has real consequences.. 
B)  affects the price level. 
C)  has no impact on prices or inflation. 
D)  is used to create economic growth in the short run. 
E)  affects output directly. 
A)  has real consequences.. 
B)  affects the price level. 
C)  has no impact on prices or inflation. 
D)  is used to create economic growth in the short run. 
E)  affects output directly.

Question 3

Debit cards and online banking has

Accepted Answer

A)  lowered the cost of banking transactions and increased the demand for money. 
B)  increased the riskiness of banks. 
C)  lowered the cost of banking transactions and reduced the demand for money. 
D)  increased the cost of banking transactions and reduced the demand for money. 
E)  decreased the riskiness of banks. 
A)  lowered the cost of banking transactions and increased the demand for money. 
B)  increased the riskiness of banks. 
C)  lowered the cost of banking transactions and reduced the demand for money. 
D)  increased the cost of banking transactions and reduced the demand for money. 
E)  decreased the riskiness of banks.

Question 4

To increase the nominal money supply,the government can

Accepted Answer

A)  drop money out of helicopters. 
B)  increase government spending and taxes by the same amount. 
C)  reduce the quantity of government bonds, with an increase in government spending or taxes. 
D)  temporarily increase government spending, with an increase in either taxes or the quantity of government bonds. 
E)  engage in open market sales of interest-bearing debt. 
A)  drop money out of helicopters. 
B)  increase government spending and taxes by the same amount. 
C)  reduce the quantity of government bonds, with an increase in government spending or taxes. 
D)  temporarily increase government spending, with an increase in either taxes or the quantity of government bonds. 
E)  engage in open market sales of interest-bearing debt.

Question 5

The Fisher relationship may be described by the following equation in which R is the nominal rate of interest,r is the real rate of interest,and i is the inflation rate.

Accepted Answer

A)   
B)   
C)   
D)   
E)   
A)   
B)   
C)   
D)   
E)

Question 6

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

Accepted Answer

A)    
B)    
C)    
D)    
E)    
A)    
B)    
C)    
D)    
E)

Question 7

Quantitative easing may not be effective because the central bank has no specific advantage over the private sector in

Accepted Answer

A)  printing currency. 
B)  issues outside money for short-term debt. 
C)  swapping short-term debt for long-term debt. 
D)  swapping inside money for outside money. 
E)  managing credit card balances. 
A)  printing currency. 
B)  issues outside money for short-term debt. 
C)  swapping short-term debt for long-term debt. 
D)  swapping inside money for outside money. 
E)  managing credit card balances.

Question 8

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 9

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

Accepted Answer

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

Question 10

Unpredictable shocks to the financial system

Accepted Answer

A)  reduce the demand for money. 
B)  increase the demand for money. 
C)  cause consumers and firms to switch to credit cards. 
D)  affect small depositors more so than large depositors. 
E)  result in money neutrality. 
A)  reduce the demand for money. 
B)  increase the demand for money. 
C)  cause consumers and firms to switch to credit cards. 
D)  affect small depositors more so than large depositors. 
E)  result in money neutrality.

Question 11

The quantity of money in circulation is governed by

Accepted Answer

A)  the federal government. 
B)  provincial governments. 
C)  individual consumers. 
D)  the central bank. 
E)  chartered banks. 
A)  the federal government. 
B)  provincial governments. 
C)  individual consumers. 
D)  the central bank. 
E)  chartered banks.

Question 12

Money supply targeting

Accepted Answer

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

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 seigniorage. 
E)  the revenue from open market purchases. 
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 seigniorage. 
E)  the revenue from open market purchases.

Question 14

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

Accepted Answer

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

Question 15

If R < q,then

Accepted Answer

A)  the marginal cost of using the credit card exceeds the marginal benefit. 
B)  the marginal benefit of using cash exceeds the marginal cost. 
C)  the real interest rate does not reach its equilibrium value. 
D)  the nominal interest rate is not in equilibrium. 
E)  the marginal benefit of using the credit card exceeds the marginal cost. 
A)  the marginal cost of using the credit card exceeds the marginal benefit. 
B)  the marginal benefit of using cash exceeds the marginal cost. 
C)  the real interest rate does not reach its equilibrium value. 
D)  the nominal interest rate is not in equilibrium. 
E)  the marginal benefit of using the credit card exceeds the marginal cost.

Question 16

Which of the following is a key element of the Friedman-Lucas Money Surprise model?

Accepted Answer

A)  workers have imperfect information about aggregate variables in the short-run. 
B)  workers are irrational. 
C)  consumers face a cash-in-advance constraint. 
D)  workers have imperfect information about aggretate variables in the long-run. 
E)  consumers are not always optimizing. 
A)  workers have imperfect information about aggregate variables in the short-run. 
B)  workers are irrational. 
C)  consumers face a cash-in-advance constraint. 
D)  workers have imperfect information about aggretate variables in the long-run. 
E)  consumers are not always optimizing.

Question 17

The most narrowly defined monetary aggregate is

Accepted Answer

A)  currency outside banks. 
B)  M1. 
C)  M2. 
D)  L. 
E)  M2++. 
A)  currency outside banks. 
B)  M1. 
C)  M2. 
D)  L. 
E)  M2++.

Question 18

In the money surprise model,labour supply responds to changes in the money supply because

Accepted Answer

A)  money is neutral. 
B)  money is superneutral. 
C)  workers cannot distinguish changes in M from changes in w. 
D)  workers cannot distinguish changes in M from changes in z. 
E)  of sticky prices. 
A)  money is neutral. 
B)  money is superneutral. 
C)  workers cannot distinguish changes in M from changes in w. 
D)  workers cannot distinguish changes in M from changes in z. 
E)  of sticky prices.

Question 19

The nominal money supply is

Accepted Answer

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

Question 20

The nominal money demand is defined as

Accepted Answer

A)    
B)    
C)    
D)    
E)    
A)    
B)    
C)    
D)    
E)

Real money demand depends

In the monetary intertemporal model,changing M

Debit cards and online banking has

To increase the nominal money supply,the government can

The Fisher relationship may be described by the following equation in which R is the nominal rate of interest,r is the real rate of interest,and i is the inflation rate.

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

Quantitative easing may not be effective because the central bank has no specific advantage over the private sector in

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

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

Unpredictable shocks to the financial system

The quantity of money in circulation is governed by

Money supply targeting

The inflation tax is

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

If R < q,then

Which of the following is a key element of the Friedman-Lucas Money Surprise model?

The most narrowly defined monetary aggregate is

In the money surprise model,labour supply responds to changes in the money supply because

The nominal money supply is

The nominal money demand is defined as

Introduction

Measurement

Business Cycle Measurement

Consumer and Firm Behavior: The Work–Leisure 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 Consumption–Savings 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

Real money demand depends

In the monetary intertemporal model,changing M

Debit cards and online banking has

To increase the nominal money supply,the government can

The Fisher relationship may be described by the following equation in which R is the nominal rate of interest,r is the real rate of interest,and i is the inflation rate.

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

Quantitative easing may not be effective because the central bank has no specific advantage over the private sector in

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

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

Unpredictable shocks to the financial system

The quantity of money in circulation is governed by

Money supply targeting

The inflation tax is

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

If R < q,then

Which of the following is a key element of the Friedman-Lucas Money Surprise model?

The most narrowly defined monetary aggregate is

In the money surprise model,labour supply responds to changes in the money supply because

The nominal money supply is

The nominal money demand is defined as

Introduction

Measurement

Business Cycle Measurement

Consumer and Firm Behavior: The Work–Leisure 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 Consumption–Savings 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