Question 1

Economic variables whose values are measured in goods are called

Accepted Answer

A)  dichotomous variables. 
B)  nominal variables. 
C)  classical variables. 
D)  real variables. 
A)  dichotomous variables. 
B)  nominal variables. 
C)  classical variables. 
D)  real variables.

Question 2

Suppose that velocity rises while the money supply stays the same. It follows that

Accepted Answer

A)  P x Y must rise. 
B)  P x Y must fall. 
C)  P x Y must be unchanged. 
D)  the effects on P x Y are uncertain. 
A)  P x Y must rise. 
B)  P x Y must fall. 
C)  P x Y must be unchanged. 
D)  the effects on P x Y are uncertain.

Question 3

Which of the following is correct?

Accepted Answer

A)  If the Fed purchases bonds in the open market, then the money supply curve shifts right. A change in the price level does not shift the money supply curve. 
B)  If the Fed sells bonds in the open market, then the money supply curve shifts right. A change in the price level does not shift the money supply curve. 
C)  If the Fed purchases bonds, then the money supply curve shifts right. An increase in the price level shifts the money supply curve right. 
D)  If the Fed sells bonds, then the money supply curve shifts right. A decrease in the price level shifts the money supply curve right. 
A)  If the Fed purchases bonds in the open market, then the money supply curve shifts right. A change in the price level does not shift the money supply curve. 
B)  If the Fed sells bonds in the open market, then the money supply curve shifts right. A change in the price level does not shift the money supply curve. 
C)  If the Fed purchases bonds, then the money supply curve shifts right. An increase in the price level shifts the money supply curve right. 
D)  If the Fed sells bonds, then the money supply curve shifts right. A decrease in the price level shifts the money supply curve right.

Question 4

Given that firms change their prices infrequently, a business that has just raised its price will have a __________ relative price; over time as its price remains fixed its relative price __________.

Accepted Answer

The answer of Given that firms change their prices infrequently,...

Question 5

The value of money falls. This might be because the Federal Reserve

Accepted Answer

A)  bought bonds, which increased the money supply. 
B)  bought bonds, which decreased the money supply. 
C)  sold bonds, which increased the money supply. 
D)  sold bonds, which decreased the money supply. 
A)  bought bonds, which increased the money supply. 
B)  bought bonds, which decreased the money supply. 
C)  sold bonds, which increased the money supply. 
D)  sold bonds, which decreased the money supply.

Question 6

Deflation

Accepted Answer

A)  increases incomes and enhances the ability of debtors to pay off their debts. 
B)  increases incomes and reduces the ability of debtors to pay off their debts. 
C)  decreases incomes and enhances the ability of debtors to pay off their debts. 
D)  decreases incomes and reduces the ability of debtors to pay off their debts. 
A)  increases incomes and enhances the ability of debtors to pay off their debts. 
B)  increases incomes and reduces the ability of debtors to pay off their debts. 
C)  decreases incomes and enhances the ability of debtors to pay off their debts. 
D)  decreases incomes and reduces the ability of debtors to pay off their debts.

Question 7

Suppose that monetary neutrality and the Fisher effect both hold. An increase in the money supply growth rate increases

Accepted Answer

A)  the inflation rate and growth of real GDP. 
B)  the inflation rate but not the growth rate of real GDP. 
C)  the growth rate of real GDP, but not the inflation rate. 
D)  neither the inflation rate nor the growth rate of real GDP. 
A)  the inflation rate and growth of real GDP. 
B)  the inflation rate but not the growth rate of real GDP. 
C)  the growth rate of real GDP, but not the inflation rate. 
D)  neither the inflation rate nor the growth rate of real GDP.

Economic variables whose values are measured in goods are called

Suppose that velocity rises while the money supply stays the same. It follows that

Which of the following is correct?

Given that firms change their prices infrequently, a business that has just raised its price will have a relative price; over time as its price remains fixed its relative price .

The value of money falls. This might be because the Federal Reserve

Deflation

Suppose that monetary neutrality and the Fisher effect both hold. An increase in the money supply growth rate increases

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Costs of Production

Firms in Competitive Markets

Monopoly

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

Filters

Exam 22: Money Growth and Inflation

Economic variables whose values are measured in goods are called

Suppose that velocity rises while the money supply stays the same. It follows that

Which of the following is correct?

Given that firms change their prices infrequently, a business that has just raised its price will have a __________ relative price; over time as its price remains fixed its relative price __________.

The value of money falls. This might be because the Federal Reserve

Deflation

Suppose that monetary neutrality and the Fisher effect both hold. An increase in the money supply growth rate increases

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Costs of Production

Firms in Competitive Markets

Monopoly

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

Filters

Given that firms change their prices infrequently, a business that has just raised its price will have a relative price; over time as its price remains fixed its relative price .