Homework Answers
"D"
As the income of the people in the market rises and the money supply is fixed interest rate will rise because the demand for money will increase and people will withdraw money from the banks to keep the bank into equilibrium the interest rate will rise.
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Recall the analysis of equilibrium in the money market you learned in class. Assume that the...
4. Recall the analysis of equilibrium in the money market you learned in class. Assume that...
4. Recall the analysis of equilibrium in the money market you learned in class. Assume that the coefficients determining the demand for real money are constant. If the nominal supply of money and the price level are fixed but the equilibrium GDP (Q) rises as the nominal interest rate is likely to rise because. Explain your answer. a. People would want to buy more bonds b. The volatility of money will rise c. The real value of money falls d....
When the money demand curve shifts right and the money supply is unchanged, the equilibrium price...
When the money demand curve shifts right and the money supply is unchanged, the equilibrium price level decreases and the equilibrium value of money increases. true false The money supply in Grayfield is $8 billion. Nominal GDP is $32 billion and real GDP is $24 billion. The central bank of Grayfield has instituted a policy of zero inflation. Assuming that velocity is stable, if real GDP grows by 2.5 percent this year then the central bank of Grayfield will increase...
Thank you in advance! Question 5 -- 12 In the long run, money demand and money...
Thank you in advance!
Question 5 -- 12 In the long run, money demand and money supply determine (1) the value of money but not the real interest rate. (2) the value of money and the real interest rate. (3) neither the value of money nor the real interest rate. (4) the real interest rate but not the value of money. Question 6 (-/2 ) When the money market is drawn with the value of money on the vertical axis,...
TANe 41. What can cause the asset demand for money curve to shift to the left?...
TANe 41. What can cause the asset demand for money curve to shift to the left? A). If the interest rate increases. C). If nominal GDP increases E). If the price level increases B). If the interest rate decresases. D). If nominal GDP decreases 42, Which of the following is true regarding the quantity of asset demand for money? A) It varies directly with the level of nominal GDP. B) It varies directly with the rate of interest C) It...
13. Suppose the United States unexpectedly decided to pay off its debt by printing new money....
13. Suppose the United States unexpectedly decided to pay off its debt by printing new money. Which of the following would happen? A. Prices would rise. B. People who had lent money at a fixed interest rate would feel poorer. C. People who held money would feel poorer. D. All of the above are correct. E. A and B, only 14. The Fisher effect A. says the government can generate revenue by printing money. B. says there is a one...
59. Market equilibrium A market equilibrium is a quantity-price pair in which: A. The government equates the selling and buying price of The price is such that the quantity demanded is equal to t...
59. Market equilibrium A market equilibrium is a quantity-price pair in which: A. The government equates the selling and buying price of The price is such that the quantity demanded is equal to the The level of happiness among people is as high as possible. supplied quantity supp A price increase would cause people to want to buy 1 of the good. E. The supply curve and demand curve are equivalent. The Marginal Product of Labor (MPL) is equal to...
Which statement best defines the velocity of money? (1 mark) a. It is the rate at...
Which statement best defines the velocity of money? (1 mark) a. It is the rate at which the central bank puts money into the economy. b. It is the long-term growth rate of the money supply. c. It is the money supply divided by nominal GDP. d. It is the average number of times per year a dollar is spent. In the 1970s, in response to recessions caused by an increase in the price of oil, the central banks in...
7. Suppose that Canada imposes an import quota on automobiles. In the open-economy macroeconomic model, which of...
7. Suppose that Canada imposes an import quota on automobiles. In the open-economy macroeconomic model, which of the following curves would this quota shift? a. supply of loanable funds left b. demand for loanable funds left c. demand for Canadian dollars right d. supply of Canadian dollars left 8. Suppose the Canadian government imposed import quotas on agricultural products. According to the foreign-currency exchange market diagram, which of the following outcomes would most likely result? a. Both the demand and supply curves...
According to the quantity equation, if velocity is stable, an increase in the money supply of...
According to the quantity equation, if velocity is stable, an increase in the money supply of three percent and an increase in real GDP of four percent causes the price level to rise by one percent. true false Money demand refers to how much wealth people want to hold in liquid form and money demand depends on both the price level and the interest rate true false Bertha gives her employees a $1 increase in their hourly wage. However, the...
36. According to liquidity-preference theory, why is the g? money-demand curve downward slopin a. because interest...
36. According to liquidity-preference theory, why is the g? money-demand curve downward slopin a. because interest rates rise as the Bank the qua b. because interest rates fall as the Bank of Canada reduces the supp c. because people will want to hold less money as the cost of doing so d. because people will want to hold more money as the cost of doing rest rates fall as the ofCanada reduces the quantity of money demanded anada reduces the...
Thank you in advance!
Question 5 -- 12 In the long run, money demand and money supply determine (1) the value of money but not the real interest rate. (2) the value of money and the real interest rate. (3) neither the value of money nor the real interest rate. (4) the real interest rate but not the value of money. Question 6 (-/2 ) When the money market is drawn with the value of money on the vertical axis,...
TANe 41. What can cause the asset demand for money curve to shift to the left? A). If the interest rate increases. C). If nominal GDP increases E). If the price level increases B). If the interest rate decresases. D). If nominal GDP decreases 42, Which of the following is true regarding the quantity of asset demand for money? A) It varies directly with the level of nominal GDP. B) It varies directly with the rate of interest C) It...
59. Market equilibrium A market equilibrium is a quantity-price pair in which: A. The government equates the selling and buying price of The price is such that the quantity demanded is equal to the The level of happiness among people is as high as possible. supplied quantity supp A price increase would cause people to want to buy 1 of the good. E. The supply curve and demand curve are equivalent. The Marginal Product of Labor (MPL) is equal to...
36. According to liquidity-preference theory, why is the g? money-demand curve downward slopin a. because interest rates rise as the Bank the qua b. because interest rates fall as the Bank of Canada reduces the supp c. because people will want to hold less money as the cost of doing so d. because people will want to hold more money as the cost of doing rest rates fall as the ofCanada reduces the quantity of money demanded anada reduces the...
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