In the long run, the key determinant of inflation is a. the money supply. b. real GDP. c. the velocity of money. d. the growth rate of the money supply e. the growth rate of income
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- Money demand is likely to increase the most during which part of the business cycle? A. peak B. recession C. contraction D. trough E. recovery__ __ refers to the specific amount of money circulating in a country'seconomy at a particular period of time. * a. Cash supplyb. Monetary policyc. The time value of moneyd. Money supplyJapan's money supply is growing rapidly at a 5.54% while real GDP is increasing at 8.29%. Japan's real interest rate is also growing at 4.46%. *we are assuming Quantity Theory of Money, Classical Dihotomy, and Fisher Effect effect are true. a. calculate the inflation rate b. calculate nominal interest rate c. calculate GDP growth rate
- a. tax increase b. economic growth c. expected inflation d. income increase e. currency appreciation f. technology breakthrough Which ones of the above economic factors will increase money supply? Which ones of the above economic factors will increase demand for money ?According to the quantity theory of money, if there is a significant increase in money supply there will be an increase in the a. Unemployment rate b. Loanable funds market c. Price level d. Real interest rateAccording to the quantity theory of money, if there is a significant increase in money supply there will be an increase in the a. Unemployment rate b. Loanable funds market c. Price level d.Real interest rate
- Fiat money is Select one: a.money backed by gold or some other precious metal. b.commodity money like salt. c.valuable only because some authority decrees it to be. d.the name given to Italian lira when it is falling in value. One of the impacts of inflation is Select one: a.the real value of money falls. b.wealth is transferred from borrowers to savers. c.an increase in speculative holdings of cash. d.higher real interest rates.According to the quantity theory of money, delation of money supply is the result of when _____ deceases while the money supply and velocity of money are stable a.Unemployment b.Nominal interest rates c.Real gdp d.Money demand15. Which one is a cost of inflation? A. Shoe-leather costs B. Menu costs C. Tax distortions D. All of the above 16. In the demand for money curve, when interest rates rises ...? A The opportunity cost of holding money increases. B. The opportunity cost of holding money decreases. C. The opportunity cost of holding money remains constant. D. None of the above. 17. To implement a contractionary policy in the economy, the Central Bank can? A. Buy bond in the market. B. Sell bonds in the market C. Do nothing, leave it to the market. D. Increase money supply. 18. To implement an expansionary policy in the economy, the Central Bank can? A. Increase interest rates. B. Sell bonds in the market. C. Leave it to the market. D. Buy bonds in the market.
- According to the quantity theory of money and theFisher effect, if the central bank increases the rateof money growth, thena. inflation and the nominal interest rate bothincrease.b. inflation and the real interest rate both increase.c. the nominal interest rate and the real interestrate both increase.d. inflation, the real interest rate, and the nominalinterest rate all increase.7. According to the quantity theory of money, which variable is most stable in thelong run?a. Velocityb. Outputc. Moneyd. Price Levels13. When the government uses its overdraft facilities at the central bank, it ___________ the quantity of moneyin the economy. This is called ___________________ financing. A Increases; deflationaryB Decreases; inflationaryC Decreases; deflationaryD Increases; inflationary