Transactions costs

All of the above

A difference between Ml and M2 is that

(A) Ml is a first mortgage and M2 is a second mortgage

(B) M2 is Ml plus assets that are more liquid

(C) M2 includes savings deposits

(D) M2 is always double Ml

(E) All of the above

Which of the following portfolio allocation decisions represents the best individual response to an increase in the interest rate on non-monetary assets?

(A) Sell some stocks and use the money to buy bonds.

(B) Sell some bonds and use the money to buy stocks.

(C) Reduce your assets and increase your liabilities.

(D) Trade some money for non-monetary assets.

(E) Sell some land and use the money to buy stocks and bonds.

Which of the following is most likely to increase if the public decides to increase its holdings of currency?

(A) The price level

(B) The interest rate

(C) Disposable personal income

(D) Employment

(E) Personal wealth

When the banking system receives $400 in additional reserves and the reserve requirement is 0.25, maximum check-writing deposit expansion is

(A) $2000, (B) $1600 (C) $1200, (D) $375, (E) $100.

The less sensitive money demand is to changes in the interest rate, the more an increase in the money stock will

(A) Increase aggregate demand and raise interest rates

(B) Increase aggregate demand and lower interest rates

(C) Decrease aggregate demand and lower interest rates

(D) Decrease aggregate demand and raise interest rates

(E) none of the above

If the government simultaneously engages in expansionary monetary and a contractionary fiscal policy, which of the following is the likely effect on interest rates and unemployment

Interest ratesUnemployment

(A) Increase Might either increase or decrease

(B) Increase Decrease

(C) Decrease Might either increase or decrease

(D) Might either increase or decrease Decrease

(E) Might either increase or decrease Increase

If the public's demand for currency decreased relative to its demand for deposits, the:

(A) Reserve requirement ratio would decrease.

(B) Currency-deposit ratio would increase.

(C) Reserve-deposit ratio would increase.

(D) Money multiplier would increase.

(E) Money multiplier would decrease.

When the Central Bank makes an open-market sale, it:

(A) Increases the money multiplier.

(B) Increases the currency to deposit ratio.

(C) Increases the monetary base.

(D) Decreases the monetary base.

(E) Decreases the money multiplier.

Which of the following policy combinations is most likely to cure a severe recession?

Open-Market OperationsTaxesDiscount Rate

(A) Buy securities Increase Decrease

(B) Buy securities Decrease Decrease

(C) Buy securities Decrease Increase

(D) Sell securities Decrease Decrease

(E) Sell securities Increase Increase

The aggregate demand curve is

(A) A horizontal summation of market demand curves

(B) A horizontal summation of firm demand curves

(C) A simple aggregation of demand curves for individual goods

(D) A vertical summation of firm demand curves

(E) Not found by adding product demand curves horizontally or vertically

Which of the following will cause the aggre­gate demand curve to shift to the left?

(A) Expectations of deficit of goods in the future

(B) A decrease in income taxes

(C) An increase in government spending

(D) A decrease in foreign income

(E) An expected inflation

According to the imperfect-information model, when the price level falls and the producer did not expect it to fall, the producer:

Increases production.

Does not change production.

Дата добавления: 2015-10-30