## Macro Unit 3

Last Updated By haoluvsu100 on 03/24/2012
649 people took this quiz
http%3A%2F%2Fwww.funnelbrain.com%2Fqc-93074-the-ease-with-which-an-asset-can-be.html

# On the graph, MS represents the money supply and MD represents the money demanded. The usual quantities are measured along the axes.Which of the following events could explain a shift in the money supply curve from MS1 to MS2 in figure A?

 a)  An increase in the value of money.
 b)  A decrease in the price level.
 c)  An open-market purchase of bonds by the Federal Reserve.
 d)  An open-market sale of bonds by the Federal Reserve.
 e)  A tax cut by the federal government.
View as Flashcard Quiz
Related Quiz Content
• Answered in Macro Unit 3
An assistant manager at a restaurant gets a \$100 a month raise. He figures that with his new monthly salary he cannot buy as many goods and services as he could buy last year.
a)His real and nominal salary has risen.
b)His real and nominal salary has fallen.
c)His real salary has risen and his nominal salary has fallen.
d)His real salary has fallen and his nominal salary has risen.
e)His nominal salary has risen but his real salary has remained the same.
d)His nominal salary has risen but his real salary has remained the same.
• Answered in Macro Unit 3
The principle of monetary neutrality implies that an increase in the money supply will
a)Increase real GDP, and the price level.
b)Increase real GDP, but not the price level.
c)Increase the price level, but not real GDP.
d)Increase the price level and decrease nominal GDP.
e)Decrease real GDP, but not the price level.
c)Decrease real GDP, but not the price level.
• Answered in Macro Unit 3
The velocity of money is
a)The rate at which the Fed puts money into the economy.
b)The same things as the long-term growth rate of money supply.
c)The money supply divided by nominal GDP.
d)The average number of times per year a dollar is spent.
e)The total money supply divided by the price index.
d)The total money supply divided by the price index.
• Answered in Macro Unit 3
Based on the quantity of money equation, if M=150, V=4, Y=200 then P would equalâ¦
a)1/3
b)1/2
c)2
d)3
e)5
d)5
• Answered in Macro Unit 3
Suppose the U.S. decided unexpectedly to pay off its debt by printing new money. Which of the following would happen?
a)People who held money would feel poorer.
b)Prices would rise.
c)People who had lent money at a fixed interest rate would feel poorer.
d)People who had borrowed money at a fixed interest rate would feel richer.
e)All of the above are correct.
e)All of the above are correct.
• Answered in Macro Unit 3
If a country is experiencing deflation, then
a)The nominal interest rates would be greater than the real interest rate.
b)The real interest rate would be greater than the nominal interest rate.
c)The real interest rate would equal the nominal interest rate.
d)The nominal interest rate would be negative and the real interest rate positive.
e)None of the above are correct.
b)None of the above are correct.
• Answered in Macro Unit 3
Which of the following is true?
a)Monetary policy is neutral in both the short run and the long run.
b)Through monetary policy is neutral in the long run, it may have effects on real variables in the short run.
c)Monetary policy has profound effects on real variables in both the short and long run.
d)Monetary policy has profound effects on real variables in the long run, but is neutral in the short run.
e)Monetary policy is much more effective than fiscal policy on real variables in the long run.
b)Monetary policy is much more effective than fiscal policy on real variables in the long run.
• Answered in Macro Unit 3
The money multiplier is used to determine how much the
a)Monetary base increases when the Fed purchases government securities.
b)Quantity of money increases when the monetary base increases.
c)Monetary base increases when the quantity of money increases.
d)Quantity of money increases when the required reserves are increased.
e)Monetary base increases when the Fed sells government bonds.
b)Monetary base increases when the Fed sells government bonds.
• Answered in Macro Unit 3
Which of the following actions is NOT carried out by the Federal Reserve.
b)Clears bank checks
c)Makes loans through the discount window
d)Print money
e)Accepts deposits
d)Accepts deposits
• Answered in Macro Unit 3
Cash in a bank is...
a)A asset to the bank.
b)owner's equity of the bank.
c)A liability of the bank.
d)Deposits to the bank.
e)Part of their excess reserves.
c)Part of their excess reserves.
Discussion Board
Macro Unit 3
Quiz Taken:649 people took this quiz
 Rate this Quiz
Teams
Quiz does not belong to any team.
Quiz Tags
Tags not available.
Quiz Review
Author Information
Others Studying this Quiz
Free Quiz Question From Macro Unit 3
Question: On the graph, MS represents the money supply and MD represents the money demanded. The usual quantities are measured along the axes.Which of the following events could explain a shift in the money supply curve from MS1 to MS2 in figure A?