Exam 22: Money Growth and Inflation

Figure 30-3. On the graph, MS represents the money supply and MD represents money demand. The usual quantities are measured along the axes. -Refer to Figure 30-3. If the relevant money-supply curve is the one labeled MS2, then

When the money market is drawn with the value of money on the vertical axis, as the price level increases which of the following increases?

Real GDP measures output of final goods and services in physical units.

Figure 30-3. On the graph, MS represents the money supply and MD represents money demand. The usual quantities are measured along the axes. -Refer to Figure 30-3. At the end of 2009 the relevant money-supply curve was the one labeled MS₁. At the end of 2010 the relevant money-supply curve was the one labeled MS₂. Assuming the economy is always in equilibrium, what was the economy's approximate inflation rate for 2010?

A decrease in the value of money __________ the quantity of money demanded. On a graph with the value of money on the vertical axis this effect on the value of money on quantity demanded is shown as ____________.

In which case below does a person's purchasing power from saving increase the most?

If the value of a dollar falls, then the quantity of money demanded

As the price level decreases, the value of money

Figure 30-2. On the graph, MS represents the money supply and MD represents money demand. The usual quantities are measured along the axes. -Refer to Figure 30-2. Suppose the relevant money-demand curve is the one labeled MD1; also suppose the economy's real GDP is 20,000 for the year. If the money market is in equilibrium, then how many times per year is the typical dollar bill used to pay for a newly produced good or service?

When the money market is drawn with the value of money on the vertical axis, a decrease in the price level causes a

Monetary neutrality means that a change in the money supply

Harvey, a U.S. taxpayer, purchased 10 shares of MVC stock for $100 per share; one year later he sold the 10 shares for $130 a share. Over the year, the price level increased from 140.0 to 147.0. What is Harvey's before­tax real capital gain?

In the U.S., people are required to pay taxes on

Menu costs refers to

According to the quantity equation, the price level would change less than proportionately with a rise in the money supply if there were also

Open-market purchases by the Fed make the money supply

When the money market is drawn with the value of money on the vertical axis, the price level increases if

Other things the same, an increase in velocity means that

According to the classical dichotomy, which of the following is influenced by monetary factors?

Other things the same, a decrease in velocity means that