Ryan savedâ $50,000 last year in his bank account so that he could buy a car this year. In thisâ case, money served the function of aâ ________.
A.
means of deferred payment
B.
unit of account
C.
store of value
D.
medium of exchange
A bank is said to have enough liquidityâ if:
A.
it holds deposits amounting to at leastâ $100,000.
B.
it operates for seven days a week for more than 12 hours a day.
C.
it has enough funds to conduct its
dayminusâtominusâday
businesses and meet the regulatory requirements.
D.
the value of its assets exceeds the value of its liabilities by at leastâ $50,000.
Consider an economy that only produces wooden chairs. Inâ 2012, the economy produced 100 wooden chairs priced atâ $10 each. The nominal GDP of the economy for the year 2012 willâ be:
A.
â$10,000.
B.
â$10.
C.
â$100.
D.
â$1,000.
Hyperinflationary episodes are always related to extremely rapid growthâ of:
A.
real GDP.
B.
money supply.
C.
interest rates.
D.
money demand.
Which of the following financial organizations have the ability to influence the supply of reserves in the Unitedâ States?
A.
The World Bank
B.
The Fed
C.
Only private commercial banks
D.
Only public sector banks
A retired worker receives a pension that is not indexed to inflation. Which of the following will happen if the rate of inflationâ rises?
A.
The retiree will be better off.
B.
Theâ retiree's purchasing power will fall.
C.
The shareholders of the firm in which he worked will lose.
D.
Theâ retiree's purchasing power will increase.
Assuming all elseâ equal, what is likely to happen to the demand curve for reserves in an economy if it goes through a period of rapidâ expansion?
A.
There will be a n upward movement along the demand curve for reserves.
B.
The demand curve for reserves will shift to the left.
C.
There will be a downward movement along the demand curve for reserves.
D.
The demand curve for reserves will shift to the right.
If the nominal interest rate in an economy isâ 9% and the expected inflation rate isâ 6%, then the expected real interest rate in the economyâ is:
A.
â15%.
B.
â9%.
C.
â6%.
D.
â3%.
If nominal GDPâ increases, what might be the cause of thisâ increase?
If nominal GDPâ increases, this could be causedâ by:
â(Select
all that
apply.â)
A.
An increase in the price level
B.
Deflation
C.
An increase in real GDP
D.
A decrease in the price level
Given the followingâ information, what is the growth rate of nominalâ GDP?
Upper Y 0Y0
real GDPâ =
â$10001000
â(in millions)
Upper Y 1Y1
real GDPâ =
â$11001100
â(in millions)
Upper Y 0Y0
price levelâ = 120120
Upper Y 1Y1
price levelâ = 130130The growth rate of nominal GDP is
nothing â%.
â (Round
your answer to the nearest
hundredth.â)
According to the quantity theory ofâ money, what must the growth rate of the money supply be given the followingâ information?
The growth rate of real GDP is
1.01.0â%.
The growth rate of nominal GDP is
3.83.8â%.
The nominal interest rate is
7.17.1â%.
The real interest rate is
4.34.3â%.
The money supplyâ (M2) is
â$10 comma 61210,612
â(in billions)According to the quantity theory ofâ money, the growth rate of the money supply must be
nothing â%.
â (Round
your answer to the nearest
tenth.â)
According to the quantity theory ofâ money, what is the inflationâ rate?
Use the information given above and calculate the inflation rate.
According to the quantity theory ofâ money, the inflation rate is
nothing â%.
â (Round
your answer to the nearest
tenth.â)
According to the quantity theory ofâ money, the inflation rate is
A.
the ratio of money supply to nominal GDP.
B.
the gap between the growth rate of money supply and the growth rate of real GDP.
C.
the gap between the nominal and real interest rates.
D.
the gap between the growth rate of money supply and the growth rate of nominal GDP.
If the inflation rate is
positivepositiveâ,
what must beâ true?
A.
The growth rate of nominal GDP
greater than>
the growth rate of money supply.
B.
The growth rate of real GDP
less than<
the growth rate of money supply.
C.
The growth rate of real GDP
greater than>
the growth rate of money supply.
D.
The growth rate of nominal GDP
less than<
the growth rate of money supply.
An open market operation isâ ____________.
A.
the process of sellingâ Fed-issued IOUs between banks.
B.
an exchange between a private bank and the Federal Reserve where the Fed buys or sells government bonds to private banks.
C.
where a bank borrows reserves or bonds from the Federalâ Reserve's discount window.
D.
an exchange between private banks where the banks buy or sell bonds to each other.
The Federal Reserve conducts open market operations when it wants toâ ____________.
A.
change the liquidity levels of banks.
B.
influence the discount rate.
C.
influence the federal funds rate.
D.
change the level of reserves it holds for banks.
When the Fed
sellssells
government bonds
toto
privateâ banks, it
â¼
the electronic reserves that banks hold.
