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Economics
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12 Feb 2020

____ describes a functional relationship between the supply of money in an economy and general price level and inverse relationship between the supply of money and the marginal value of money.

 

a) Quantity theory of money.

b) Liquidity preference theory of money.

c) Cambridge equation.

d) None of the above.

 

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Beverley Smith
Beverley SmithLv2
12 Feb 2020

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Related questions

Which of the following statements is true?

a) the speculative demand for money at possible interest rates gives the demand curve for money its upward slope.

b) there is an inverse relationship between the quantity of money demanded and interest rates

c) according to the quantity theory of money any change in the money supply will have no effect on the price level. 

d) all of the answers are correct. 

 

Define transaction demand for money. Which of the following statements is true? 

a) the speculative demand for money at possible interest rates gives the demand curve for the money an upward slope. 

b) there is an inverse relationship between the quantity of money demanded and interest rates

c) according to the quantity theory of money, any change in the money supply will have no effect on the price level. 

d) all of the answers are right. 

 

1. The quantity theory of money, can be used to show what relationship between P, M and Y?

a. Inverse relationship between P and M, given Y

b. Inverse relationship between P and Y, given M

c. Positive or direct relationship between P and Y, given M

d. None of the above

2. Sticky prices give us what type of supply curve?

a. Long run horizontal supply curve

b. Long run vertical supply curve

c. Short run horizontal supply curve

d. Short run vertical supply curve

3. The long run aggregate supply curve (LRAS) implies that unemployment is

a. At the natural rate

b. The sum of structural and frictional unemployment

c. Both (a) and (b)

d. None of the above

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