871. Banks create money by ?
A. printing it
B. issuing debit cards
C. accepting cheques
D. lending out part of their deposits

872. If banks and the private sector decide to hold less cash the money multiplier will be ?
A. Unchanged
B. Larger
C. Smaller
D. Unstable

873. If the keep some money available in case I see a bargain this is an example of ?
A. asset demand for money
B. transactions demand for money
C. token demand for money
D. precautionary demand for money

874. Assume that commercial banks are holding excess reserves because business firms and consumers are not willing to borrow money A decrease in the discount rate is likely to ?
A. increase the money supply because it is now cheaper for banks to borrow from the central bank
B. decrease the money supply because it will now be more expensive for business firms and consumers to borrow money
C. Not change the money supply because banks already have excess reserves they cannot lend
D. Decrease the money supply because it is now cheaper for banks to borrow from the central bank instead instead of buying government securities

875. When economies speak of the demand for money which of the following are they asking ?
A. How much cash do you wish you could have?
B. How much wealth would you like?
C. How much income would you like to earn?
D. What proportion of your financial assets do you want to hold in non-interest-bearing forms

876. Which of the following events will lead to a decrease in the equilibrium interest rate ?
A. A sale of government securities by the central bank
B. An increase in the level of aggregate output
C. An increase in the discount rate
D. A decrease in the price level

877. The motive for holding money that encourages investors to hold bonds when interest rates are low, with the hope of selling them when interest rates are high, is the ?
A. Transactions motive
B. precautionary motive
C. profit motive
D. speculation motive

878. The demand for money represents the idea that there is ?
A. a positive relationship between the interest rate and the quantity of money demanded
B. a negative relationship between the price level and the quantity of money demanded
C. a negative relationship between the level of aggregate output and the quantity of money demanded
D. a negative relationship between the interest rate and the quantity of money demanded

879. The equilibrium level of aggregate output is determined in ?
A. the goods and labor markets.
B. the goods market
C. the money markets
D. the money and labor market

880. The interest rate is determined in ?
A. the money and labor markets
B. the goods and labor markets
C. the goods market
D. the money markets

 

This Post Has One Comment

Leave a Reply