Demand for real money balances depends on ________. A) the price level B) the real interest rate C) the opportunity cost of holding money D) all of the above E) none of the above ANSWER C
Date: September 10th, 2020
The notion that lenders must select from a pool of bad credit risks, because the most undesirable borrowers are those that most actively seek out a loan is known as the ________. A) moral hazard problem B) ornamental torsion problem C) adverse selection problem D) asymmetric innovation problem ANSWER C
Date: September 10th, 2020
In the new classical model, all wages and prices ________. A) are completely flexible with respect to expected changes in the price level B) are fixed with respect to expected changes in the price level C) are flexible with respect to the value of the dollar D) are fixed with respect to the money supply […]
Date: September 10th, 2020
The liquidity preference theory ________. A) distinguishes between nominal and real quantities B) shows that demand for real balances depends on real income C) shows that demand for real balances depends on the nominal interest rate D) all of the above E) none of the above ANSWER D
Date: September 10th, 2020
If we observe an economy in which desired saving has changed, but there has been no change in actual investment, we may infer that ________. A) net exports have changed B) actual saving has changed C) the domestic real interest rate has not changed D) all of the above E) none of the above […]
Date: September 10th, 2020
Channeling funds to individuals with productive investment opportunities is the function of ________. A) the financial sector B) state and local governments C) the central bank D) state, local and federal governments ANSWER A
Date: September 10th, 2020
________ is a good measure of the opportunity cost of holding money. A) The real interest rate B) Liquidity preference C) Real income D) The inflation rate E) none of the above ANSWER E
Date: September 10th, 2020
If the interest rate increases, lifetime wealth (we) A) increases. B) stays constant. C) decreases. D) changes in an ambiguous way. ANSWER C
Date: September 10th, 2020
Average labor productivity tends to be A) procyclical and less variable than real GDP. B) procyclical and more variable than real GDP. C) countercyclical and less variable than real GDP. D) countercyclical and more variable than real GDP. ANSWER A
Date: September 10th, 2020
Which of the following is an exogenous variable in the model of a small open economy, but an endogenous variable in the model of a large open economy? A) B) C C) Y D) NX E) G ANSWER A
Date: September 10th, 2020
