ch4
Ch4
1. Which of the following is not a function of money?
A. It is a means of production.
B. It is a unit of account.
C. It is a store of value.
D. It is a medium of exchange.
2. One purpo of money is to transfer purchasing power from the prent into the future. This function of money is called
A. store of value.
B. index of inflation.
C. medium of exchange.
D. unit of account.
3. One purpo of money is to provide the terms in which prices are quoted and debts are recorded. This function of money is called
A. store of value.
B. index of inflation.
C. medium of exchange.
D. unit of account.
4. One purpo of money is to be the item we u to buy and ll things. This function of money is called
A. store of value.
B. index of inflation.
C. medium of exchange.
D. unit of account.
5. Of all of the following that could be ud as money, which would be most likely to be characterized as fiat money?
A. Chocolate bars
B. Silver jewelry
C. Gum wrappers
D. Salt
6. Which of the following is a type of open-market operation?
A. The government lls Treasury bills to the public.
B. The government prints money and us it to buy army uniforms.
C. The Fed lls Treasury bills to the public.
D. The Fed buys foreign currency in the exchange market.
桂花泡水7. M2 does not include
A. currency.
B. long-term government bonds.
C. traveler's checks.
D. demand deposits.
8. In the quantity equation, V reprents the
A. total number of transaction during some period of time.
B. price of a typical transaction.
C. rate at which money circulates in the economy.
D. quantity of money.
9. According to the quantity equation, if M increas by 3 percent and V increas by 2 percent, then
A. real income increas by approximately 5 percent.
B. the price level increas by approximately 5 percent.
C. the nominal interest rate increas by approximately 5 percent.
D. nominal income increas by approximately 5 percent.
10. According to the quantity equation, which of the following might happen if the money supply increas?
A. Velocity is constant, prices are constant, and total output increas.
B. Velocity increas, prices are constant, and total output is constant.
C. Velocity is constant, prices fall, and total output is constant.
D. Velocity ris, prices fall, and total output is constant.
11. Consider an economy where the money supply is growing at 7 percent per year and velocity is constant. Which of the following statements about real GDP growth and the inflation rate could be tru
e?
A. Real GDP is growing at 2 percent and inflation is 5 percent.
B. Real GDP is growing at 7 percent and inflation is 7 percent.
剁椒蒸鱼头C. Real GDP is growing at 2 percent and inflation is 9 percent.
D. Real GDP is growing at 9 percent and inflation is 2 percent.
12. Consider an economy where the only goods traded are coconuts and pineapples. Last year, 100 coconuts were sold at $1 apiece, and 200 pineapples were sold at $2.50 apiece. If the money supply was $100, what was velocity?
A. 30
B. 15
C. 6
中国供应商D. 5
13. Which component of the quantity equation is assumed constant by the quantity theory of money?
A. The money supply
B. The velocity of money
C. The level of income
D. The price level
14. The quantity theory of money states that if the money supply doubles and output is constant, prices will
A. fall by half.
B. remain the same.
C. double.
D. fall only if velocity ris.
15. The difference between the nominal interest rate and the real interest rate is
模棱两可是什么意思A. inflation.
B. taxes.
C. ignorage.
D. hyperinflation.
16. The Fisher equation states that a 1 percent ri in the rate of inflation caus a 1 percent ri in the
A. real interest rate.
B. nominal interest rate.
C. money supply.
D. number of transactions.
17. The ex ante real interest rate differs from the ex post real interest rate only when
A. the money supply grows at a constant rate.
B. the money supply remains the same.
C. the money supply falls at a constant rate.
D. actual inflation differs from expected inflation.
18. Which of the following statements is fal?
A. If inflation is higher than the real interest rate, then the nominal interest rate must be negative.
B. If inflation is higher than the nominal interest rate, then the real interest rate must be negative.
C. If the nominal interest rate is higher than the real interest rate, then inflation
must be positive.
D. If the nominal interest rate is higher than inflation, then the real interest rate
must be positive.
19. Consider the following table
Year Inflation Rate Nominal Interest Rate
1 5% 10%
2 10% 5%
By how much has the real interest rate changed between year 1 and year 2?
A. It has incread 5 percent.
B. It has decread 5 percent.
C. It has incread 10 percent.
D. It has decread 10 percent.
20. The expected rate of inflation does not influence the
A. demand for real money balances.
B. ex post real interest rate.
C. nominal interest rate.
D. current price level.
21. Government revenue raid through the printing of money is called
A. hyperinflation.
土茯苓的功效和作用B. ignorage.
C. income taxes.
D. sales taxes.
22. Suppo that the price level has rin but the government has not collected any ignorage. Which of the following might have happened?
A. V ro, M and Y were constant
B. Y ro, M and V were constant
C. M ro, Y and V were constant
D. M ro, Y fell, V was constant
23. When the government rais revenue by printing money, it impos an "inflation tax" becau the
A. real value of money holdings falls.
B. interest rate falls.
C. difference between nominal and real interest rates becomes smaller.
D. nominal value of money holdings falls.
24. The cost of holding money is determined by the
A. inflation rate.
朦朦胧胧的意思
B. real interest rate.
C. growth rate of the money supply.
D. nominal interest rate.
25. An increa in the expected rate of inflation will
屏锁
A. lower the demand for real balances becau the real interest rate will ri.
B. lower demand for real balances becau the nominal interest rate will ri.
C. increa the demand for real balances becau the real interest rate will fall.
D. increa the demand for real balances becau the nominal interest rate will
ri.
26. The expected future money supply does not have an effect on
A. expected future inflation.
B. the current price level.
C. the current nominal money supply.
D. the future price level.
27. Choo the pair of words that best completes this ntence: The nominal interest rate is the sum of the ex-ante real interest rate and the _________ inflation rate, and real money balances are a function of the ___________ interest rate.
A. expected; nominal
B. actual; nominal
C. actual; real
D. expected; real
28．If an individual is to hold lower money balances on average, she must make more frequent trips to the bank to withdraw money. This inconvenience of reducing money holding is called
A. a menu cost.
B. a shoeleather cost.
C. an inflation tax.
D. ignorage.
29．One effect of an unexpected ri in inflation is that wealth is redistributed from
A. borrowers to lenders.
B. lenders to borrowers.
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C. young people to old people.
D. government to firms.
30．Which of the following is not a social cost of inflation?
A. The money that people hold los value due to the inflation tax.
B. People hold smaller real balances and so have to make more frequent trips to the bank.
C. Firms have to spend money to change prices more frequently.
D. Inflation leads to greater variability in the relative prices charged by firms. 31．One possible benefit from inflation is:
A. inflation caus restaurants to update their menus more often.
B. inflation reduces distortions to relative prices.
C. if nominal wages are fixed, inflation decreas real wages.
D. if nominal wages are fixed, inflation increas real wages. 32．Hyperinflation usually starts when
A. people start spending too much money.
B. firms demand higher and higher prices for their goods.
C. governments are forced to print money to finance their spending.
D. fiscal deficits are small.
33．According to the classical dichotomy, which of the magnitudes is affected by monetary policy?
A. The price level
B. The real wage
C. The real interest rate
D. The rate of growth of real GDP
