Question 1

With money supply shocks in the intertemporal model with money,the price level is

Accepted Answer

A)  procyclical. 
B)  acyclical. 
C)  countercyclical. 
D)  somewhat cyclical. 
A)  procyclical. 
B)  acyclical. 
C)  countercyclical. 
D)  somewhat cyclical.

Question 2

If an increase in the level of money supply leads to a proportionate increase in prices with no effect on real variables ,we say that

Accepted Answer

A)  the Fisher relationship holds. 
B)  money is neutral. 
C)  money is superneutral. 
D)  money is a medium of exchange. 
A)  the Fisher relationship holds. 
B)  money is neutral. 
C)  money is superneutral. 
D)  money is a medium of exchange.

Question 3

The most significant problem in trying to empirically measure the real rate of interest is that

Accepted Answer

A)  there are so many different types of bonds. 
B)  expected inflation is unobservable. 
C)  interest rates fluctuate so much from day to day. 
D)  banks infrequently change the prime rate of interest. 
A)  there are so many different types of bonds. 
B)  expected inflation is unobservable. 
C)  interest rates fluctuate so much from day to day. 
D)  banks infrequently change the prime rate of interest.

Question 4

Money neutrality states that

Accepted Answer

A)  with money, one can still use the representative agent. 
B)  changes in money do not affect real aggregates. 
C)  changes in inflation do not affect real aggregates. 
D)  monetary policy is independent from politics. 
A)  with money, one can still use the representative agent. 
B)  changes in money do not affect real aggregates. 
C)  changes in inflation do not affect real aggregates. 
D)  monetary policy is independent from politics.

Question 5

The equilibrium price of credit card services is

Accepted Answer

A)  the real quantity of money. 
B)  determined only by the demand for credit card services. 
C)  the nominal interest rate. 
D)  equal to the average cost of credit card services. 
A)  the real quantity of money. 
B)  determined only by the demand for credit card services. 
C)  the nominal interest rate. 
D)  equal to the average cost of credit card services.

Question 6

The real return on bonds is

Accepted Answer

A)  0. 
B)  r. 
C)  R. 
D)  i. 
A)  0. 
B)  r. 
C)  R. 
D)  i.

Question 7

We want money mostly because

Accepted Answer

A)  it makes us happy. 
B)  we can buy goods with it. 
C)  we lengthen the life of our mattress. 
D)  we trust it. 
A)  it makes us happy. 
B)  we can buy goods with it. 
C)  we lengthen the life of our mattress. 
D)  we trust it.

Question 8

When the Federal Reserve buys Treasury bonds,it is called

Accepted Answer

A)  a swap. 
B)  an open market operation. 
C)  a bond roll-over. 
D)  bonding. 
A)  a swap. 
B)  an open market operation. 
C)  a bond roll-over. 
D)  bonding.

Question 9

The Taylor rule

Accepted Answer

A)  is a rule stating that money should grow at a constant rate. 
B)  is not considered to be a practical policy rule for central banks to follow. 
C)  dictates that the central bank's target interest rate be responsive to real economic activity and to inflation. 
D)  dictates that the nominal interest rate stay constant in the long run. 
A)  is a rule stating that money should grow at a constant rate. 
B)  is not considered to be a practical policy rule for central banks to follow. 
C)  dictates that the central bank's target interest rate be responsive to real economic activity and to inflation. 
D)  dictates that the nominal interest rate stay constant in the long run.

Question 10

An open-market operation refers to

Accepted Answer

A)  changing the money supply by changing taxes. 
B)  changing the money supply by changing government spending. 
C)  an exchange of money for interest-bearing debt by the monetary authority. 
D)  an exchange of domestic money for foreign money by the monetary authority. 
A)  changing the money supply by changing taxes. 
B)  changing the money supply by changing government spending. 
C)  an exchange of money for interest-bearing debt by the monetary authority. 
D)  an exchange of domestic money for foreign money by the monetary authority.

Question 11

The current demand for money increases when

Accepted Answer

A)  current real income increases. 
B)  future real income decreases. 
C)  the nominal rate of interest increases. 
D)  none of the above. 
A)  current real income increases. 
B)  future real income decreases. 
C)  the nominal rate of interest increases. 
D)  none of the above.

Question 12

Which of the following increases money demand?

Accepted Answer

A)  Disruptions in the banking system. 
B)  The introduction of online banking. 
C)  The wider availability of ATMs. 
D)  The introduction of deposit insurance. 
A)  Disruptions in the banking system. 
B)  The introduction of online banking. 
C)  The wider availability of ATMs. 
D)  The introduction of deposit insurance.

Question 13

In the Friedman-Lucas money surprise model

Accepted Answer

A)  consumers cannot observe all aggregate variables. 
B)  prices are sticky. 
C)  money is neutral. 
D)  credit market frictions matter. 
A)  consumers cannot observe all aggregate variables. 
B)  prices are sticky. 
C)  money is neutral. 
D)  credit market frictions matter.

Question 14

If an increase in the level of the money supply results in a proportionate increase in prices with no effect on any real variables,we say that

Accepted Answer

A)  the Fisher relationship holds. 
B)  money is neutral. 
C)  money is superneutral. 
D)  money is the most preferred store of value. 
A)  the Fisher relationship holds. 
B)  money is neutral. 
C)  money is superneutral. 
D)  money is the most preferred store of value.

With money supply shocks in the intertemporal model with money,the price level is

If an increase in the level of money supply leads to a proportionate increase in prices with no effect on real variables ,we say that

The most significant problem in trying to empirically measure the real rate of interest is that

Money neutrality states that

The equilibrium price of credit card services is

The real return on bonds is

We want money mostly because

When the Federal Reserve buys Treasury bonds,it is called

The Taylor rule

An open-market operation refers to

The current demand for money increases when

Which of the following increases money demand?

In the Friedman-Lucas money surprise model

If an increase in the level of the money supply results in a proportionate increase in prices with no effect on any real variables,we say that

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

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking

Inflation, the Phillips Curve, and Central Bank Commitment

Filters

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

With money supply shocks in the intertemporal model with money,the price level is

If an increase in the level of money supply leads to a proportionate increase in prices with no effect on real variables ,we say that

The most significant problem in trying to empirically measure the real rate of interest is that

Money neutrality states that

The equilibrium price of credit card services is

The real return on bonds is

We want money mostly because

When the Federal Reserve buys Treasury bonds,it is called

The Taylor rule

An open-market operation refers to

The current demand for money increases when

Which of the following increases money demand?

In the Friedman-Lucas money surprise model

If an increase in the level of the money supply results in a proportionate increase in prices with no effect on any real variables,we say that

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

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking

Inflation, the Phillips Curve, and Central Bank Commitment

Filters