A person is preparing for a long automobile trip and cashes in a certificate of deposit for cash in case of emergencies along the way. This is an example of the A) transactions demand for money. B) asset demand for money. C) precautionary demand for money. D) wealth demand for money. ANSWER C
Date: September 2nd, 2020
The share of net public debt owed to foreign residents today is close to A) 80 percent. B) 10 percent. C) 100 percent. D) 50 percent. ANSWER D
Date: September 2nd, 2020
A rightward shift of long-run aggregate supply without any change in aggregate demand A) results in a lower price level. B) increases the price level along with an increase in real GDP. C) will leave real GDP unchanged. D) increases the price level without any change in real GDP. ANSWER A
Date: September 2nd, 2020
If the real interest rate is lower than the equilibrium real interest rate: A) the quantity of credit demanded equals the quantity of credit supplied. B) the quantity of credit demanded falls short of the quantity of credit supplied. C) the quantity of credit supplied falls short of the quantity of credit demanded. D) interest […]
Date: September 2nd, 2020
The relationship that tells us how much a person intends to spend at various levels of income is A) the expenditure function. B) the consumption function. C) the buying function. D) the spending function. ANSWER B
Date: September 2nd, 2020
The asset demand for money is related to the function of money called A) medium of exchange. B) standard of deferred payment. C) store of value. D) unit of account. ANSWER C
Date: September 2nd, 2020
Which of the following holds true in a circular flow diagram? A) Income flow are represented by drawing an arrow from the household sector to firms. B) Factor flows are represented by drawing an arrow from the firm sector to the household sector. C) Production flows are represented by drawing an arrow from the firm […]
Date: September 2nd, 2020
________ occurs when the Fed creates a large amount of reserves to buy long-term bonds from banks. A) Budgetary surplus B) Monetary neutrality C) Money illusion D) Quantitative easing ANSWER D
Date: September 2nd, 2020
Institutions and laws, such as patent protection, that foster innovations lead to economic growth because they A) give businesses loans to buy new machinery. B) give confidence to consumers that the products they buy are safe. C) allow the government control of the innovations. D) give confidence to inventors that they will profit from their […]
Date: September 2nd, 2020
Which of the following is NOT a reason why real GDP can be expanded beyond a level consistent with its long-run growth path in modern Keynesian analysis? A) Higher prices induce firms to hire more workers. B) The existing capital stock can be used more intensively. C) Prices and wages are flexible, allowing for needed […]
Date: September 2nd, 2020
