Question

02A. ​Another term for the purchasing power of money is:

​​a.) the exchange value of money.

​​b.) the price of money.

​​c.) the commodity price of money.

​​d.) the asset price of money.

02B.​The Quantity Theory of Money applies:

a.) regression analysis to the study of money.

b.) input–output analysis to the study of money.

c.) demand and supply analysis to the study of the economic good money.

d.) probability theory to the study of money.

02C.​The two ways to define money are the:

a.) a priori and inductive approaches.

b.) a priori and empirical approaches.

c.) a priori and deductive approaches.

d.) descriptive and empirical approaches.

02D.​ The natural rate of interest is the sum of:​

​​a.) the pure rate, the debtors’ risk, inflationary price and liquidity premiums plus

consideration of monetary policy actions undertaken by the central bank.

​​b.) the pure rate, the inflationary price premium, the liquidity premium ​​​ ​ and consideration of the monetary policy actions by the central bank.

​​c.) the nominal rate of interest and the inflationary price premium.

​​d.) the pure rate, plus the debtors’ risk, inflationary price and liquidity premiums.

02E.​The real rate of interest is equal to:

​​a.) the sum of three conceptual components: the pure rate; the debtors’

risk premium; and a positive or negative price premium.

​​b.) the nominal rate of interest less the inflationary price premium.

​​c.) the pure rate of interest plus the inflationary price premium.

​​d.) the nominal rate of interest less the debtors’ risk premium.

Answer 1

ANSWERS

Q2A

b) price of money

Q2B

a) regression anlaysis to the study of money

Q2C

b) a priori and empirical approaches.

Q2 D

d) the pure rate, plus the debtors’ risk, inflationary price and liquidity premiums.

Q2E

b.) the nominal rate of interest less the inflationary price premium.