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1The money demand curve is shown in a graph with an interest rate on short term assets on the vertical axis. Why use short-term interest on the vertical axis and not the rate of return on other financial assets?
2what will happen to the money supply is Jamie withdraws $400 from her chewing account and the reserve ratio is 5%
3 Using gold as an example, what is the difference between commodity money and commodity-backed money?
4Suppose the annual inflation rate at 7% and 3% of the labor force is unemployed. If you were on the governing council of the bank of Canada, what action would you prescribe? How would this affect the economy, the inflation rate, and the unemployment rate?

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Chika Ilonah
Chika IlonahLv10
28 Sep 2019

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Related questions

1. Suppose the bank of Canada wanted to increase the supply of money. How could it use monetary policy to achieve the goal?
2.The money demand curve is shown in a graph with an interest rate on short term assets on the vertical axis. Why use short-term interest on the vertical axis and not the rate of return on other financial assets?
3 what will happen to the money supply is Jamie withdraws $400 from her chewing account and the reserve ratio is 5%
4. Using gold as an example, what is the difference between commodity money and commodity-backed money?
5. Suppose the annual inflation rate at 7% and 3% of the labor force is unemployed. If you were on the governing council of the bank of Canada, what action would you prescribe? How would this affect the economy, the inflation rate, and the unemployment rate?

1. Which of the following is likely to happen if the Fed buys Treasury securities from banks?

  interest rate rises; investment falls
  interest rate rises; investment rises
  interest rate falls; investment rises
  interest rate falls; investment falls

2. The main goal of monetary policy is to shift

  AD.
  SRAS.
  LRAS.
  both AD and SRAS.
  both AD and LRAS.

3. Which of the following is true regarding the effects of an expansionary monetary policy?

  Printing more money will affect real GDP only in the short run because all prices do not adjust fully in the short run.
  Printing more money will affect real GDP both in the short and long run because inflation is a natural occurrence of expansionary monetary policy.
  Printing more money will not lower the value of money in the short run because prices are fully flexible in the short run.
  Printing more money will ultimately raise the value of money in the long run because prices are fully flexible in the long run.

4. In which of the following cases are you likely to be adversely affected by unexpected inflation?

  You, the owner of a local restaurant, charge the price of lamb lasagna as per the daily market rate of lamb.
  You purchase Mountain Dew every day from the dormitory vending machine, which keeps its prices fixed for the entire school year.
  You, the owner of an airline company, sign a two-year contract for airline fuel.
  You deposit $10,000 in a bank account for 5 years for a fixed interest rate of 1%.

5. The Phillips curve depicts the relation between

  real GDP and price level.
  price level and inflation rate.
  unemployment rate and inflation rate.
  unemployment rate and real GDP.

6. Which of the following statements is true regarding the shapes of short-run and long-run Phillips curves?

  The short-run Phillips curve is vertical and the long-run Phillips curve is downward sloping.
  The short-run Phillips curve is downward sloping and the long-run Phillips curve is vertical.
  Both the short-run and long-run Phillips curves are downward sloping.
  Both the short-run and long-run Phillips curves are vertical.

7. Suppose the table below lists the actual annual inflation rates for 2010 to 2015. What would be the most likely predictions people make about the inflation rate for 2016 based on adaptive and rational expectations theories, respectively?

Year Actual Inflation rate
2010 0%
2011 0%
2012 3%
2013 3%
2014 6%
2015 6%
   
  6% and 3%
  6% and 9%
  6% and 12%
  9% and 6%
  3% and 6%

8. Which of the following can change relatively quickly in the short-run?

  the price of a latte in a coffee shop
  the salary of a finance professor
  the rent paid for a store

Question 1

The higher the capital utilization rate, the greater the depreciation rate.

True
False

Question 2

Higher capital utilization rates may raise the user costs of capital because higher utilization rates imply

operating at inconvenient times.
paying overtime to employees operating the machines.
operating when complementary services like transporters are unavailable or more expensive.
All of the above.

Question 3

If the rental price of capital increase, the capital utilization rate

increases.
decreases.
remains the same.

depends on whether the substitution rate is greater than the income effect

Question 4

The vacancy rate in the labor market is

the number of job openings divided by the number of unemployed people in the labor force.
the number of job openings divided by the number of workers in the labor force.
the ratio of open jobs to filled jobs.
the ratio of open jobs to the total number of jobs that employers want occupied.

Question 5

Unemployment can exist in a market clearing model if it takes some search time for workers to find jobs.

True
False

Question 6

A decrease in workers’ effective real incomes while they are unemployed will

lower the job finding rate and raise the expected duration of unemployment.
lower the job finding rate and the expected duration of unemployment.
raise the job finding rate and lower the expected duration of unemployment.
raise the job finding rate and the expected duration of unemployment.

Question 7

In the Barro model, the natural rate of unemployment is

positively related to the job separations rate.
zero.
fixed.
positively related to the job finding rate.

Question 8

If the interest rate increases, the real demand for money also increases

True
False

Question 9

Commodity money is money that has value because

of the intrinsic value of the commodity.
it is legal tender.
the government says so.
All of the above.

Question 10

High-powered money is

money held by business for investment.
total currency in circulation plus depository institution deposits at the Fed.
total currency in circulation.
government bonds held by the public and depository institutions.

Question 11

U.S. M1 money includes

currency held by the public.
checkable deposits.
traveler’s checks.
All of the above.

Question 12

U.S. M2 money includes

currency, time deposits, and government bonds.
savings deposits, small time deposits, and private bonds.
checkable deposits, savings deposits, and small time deposits.
retail money market mutual funds, small time deposits, and government bonds.

Question

Money is different from other assets like capital and bonds in that

money does not pay interest.
money has intrinsic value.
money is a better long term store of value.
All of the above.

Question

If a person’s income doubles, we expect their cash holdings to

double
more than double.
less than double.
decrease.

Question 15

Real money demand does not change when

nominal GDP changes.
the interest rate changes.
the price level changes.
All of the above.

Question 16

All else constant, the price level rises when the supply of money increases.

True
False

Question 17

If the nominal interest rate were to increase, then

money demand decreases and the price level increases.
money demand increases and the price level decreases.
the money supply and the price level would increase.
the money supply and the price level would decrease.

Question 18

Real money demand is a function of real GDP and the nominal interest rate.

True
False

Question 19

The real return on money is zero.

True
False

Question 20

If the expected inflation rate is 5% and the unexpected inflation rate is 4%, the actual inflation is

1%
9%
-1%
1.25%

Question 21

When the rate of growth of money is constant

the inflation rate equals the growth rate of money.
the nominal interest rate rises.
real money balances are declining.
All of the above.

Question 22

A decrease in the money growth rate in the market clearing model causes

a decrease in the nominal interest rate.
an increase in money demand.
a decrease in the price level.
All of the above.

Question 23

A decrease in the money growth rate in the market clearing model causes

an increase in the nominal interest rate.
an increase in money demand.
an increase in the price level.
All of the above.

Question 24

Under price level targeting the money supply becomes

neutral
endogenous
exogenous
predetermined

Q 25 During a recession, the interest rate falls tending to cause money demand to rise, but is at least partly offset by real GDP falling tending to cause money demand to fall.

True
False

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