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Money Market Flashcards | StudBud
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Money Market
Money Market
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1,306 plays
Money market, equation of exchange
Flashcards
12 cards
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Practice quiz
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Questions
12
Answers
1
The shift to M
s
2
could be caused by
an increase in the Federal funds rate
open market operations buy securities
the Fed buying bonds
a decrease in the discount rate
2
The value of money is determined by
the reserve ratio
1/price level
Dt + Da
r+π
3
The shift in the graph could be caused by
The Fed buying bonds
raising the discount rate
raising the reserve requirement
raising the federal funds rate
4
The money people consume with is represented by the Demand for
Exchange De
Transactions Dt
Consumption Dc
Assets Da
5
If the Fed increases the Money Supply, interest rates
fall
are unrelated to Sm
are unchanged
rise
6
Quantity of money supplied at any given time in the economy is fixed, the money supply curve is
downward sloping
a horizontal line
upward sloping
a vertical line
7
Costs from running around that people do to try to avoid losses from the falling money values.
uncertainty costs
confusion costs
shoe leather costs
deflation costs
8
Because the government receives revenue and the individual loses money, inflation is
a net positive on the economy.
a necessary evil.
non-punitive.
a tax.
9
The equation of exchange is
GDP=Y
1/P
MV=PQ=GDP
Dt+Da
10
In the long run an increase in the quantity of money gives a(n) ____ change in the price level.
indeterminant
equal
greater
smaller
11
The quantity theory of money prediction is based on the fact that the velocity of money is
exponential
stable
unpredictable
linear
12
The shift from M
d
0
to M
d
1
could be caused by
an increase in GDP
raising the reserve requirement
a decrease in asset demand
an increase in the discount rate
