You are watching: If congress imposes a $5 tax on each atm transaction, the demand for money will likely:
Janet Yellen is: A) chair of the Board of Governors of the Federal Reserve System. B) an AIG executive who received large bonoffers. C) a Supreme Court justice that ruled that budgain deficits are unconstitutional. D) a financial adviser on CNBC.
Generally, the more liquid an ascollection is, the: A) reduced its purchasing power. B) reduced its price of rerevolve. C) higher its capacity to keep value over time. D) better its rate of rerotate.
The short-lived interest price applies to financial assets that mature within: A) less than a year. B) a year or more. C) 2 years. D) 5 years.
If in the time of 2007 the interest price on one-month Treasury bills was 2% and also throughout 2008 it was 2%, the chance cost of holding money: A) lessened. B) came to be negative. C) increased. D) did not adjust.
If a checking account has actually an interemainder price of 1% and a Treasury bill has actually an interemainder rate of 3%, the opportunity cost of holding cash in a checking account is: A) zero. B) 0%. C) 1%. D) 2%.
People forgo interemainder and organize money: A) because they are compelled to. B) to minimize their transactivity costs. C) because tbelow are no substitutes for money. D) bereason banks are too riskies.
If a checking account has an interemainder price of 1% and a Treasury bill has actually an interemainder price of 2%, the chance price of holding the checking account as money is: A) zero. B) 0%. C) 1%. D) 2%.
The opportunity price of holding money is: A) zero. B) the interest price when someone provides a credit card. C) the difference in between interemainder prices on monetary assets and on nonmonetary
assets. D) the discount rate.
We hold money to:A) earn interest.B) alleviate transaction costs.C) rise transaction costsD) defend our purchasing power.
Short-term interemainder rates use to financial assets due within:A) 24 hours.B) 3 months.C) six months.D) one year.
The interemainder revenue one gives as much as host more liquid assets are:A) an chance price.B) a transactivity cost.C) an ascollection of the agency.D) a licapacity of the firm.
The money demand also curve is _ because a reduced interest price _ the opportunityprice of holding money.A) upward-sloping; increasesB) downward-sloping; increasesC) upward-sloping; decreasesD) downward-sloping; decreases
The slope of the demand also curve for money is:A) vertical.B) horizontal.C) positive.D) negative.
A decrease in the demand for money would result from:A) a rise in income.B) a decrease in genuine GDP.C) a boost in the price level.D) a boost in nominal GDP.
A decrease in the demand also for money would certainly outcome from:A) a rise in income.B) a rise in real GDP.C) a decrease in the price level.D) a boost in nominal GDP.
An increase in the demand also for money would outcome from a(n):A) decrease in nominal GDP.B) decrease in genuine GDP.C) decrease in the price level.D) boost in the price level.
An increase in the aggregate price level _____ the demand for money.A) increasesB) decreasesC) does not affectD) left-shifts
A 20% increase in the accumulation price level will certainly boost the quantity of moneydemanded by:A) 20%.B) the money multiplier.C) 10%.D) fifty percent of the money multiplier.
An boost in interemainder rates reasons the demand for money to:A) boost.B) decrease.C) remain the exact same.D) change to the right.
U. financial institutions did not offer interemainder on checking accounts until the start of the 1980s.As an outcome, prior to the at an early stage 1980s:A) the chance prices of keeping funds in checking accounts was zero.B) the possibility costs of keeping funds in checking accounts was reduced.C) the possibility prices of keeping funds in checking accounts was greater.D) civilization maintained money under their mattress.
If inflation rises from 2% to 5%, the money demand also curve will:A) remain constant.B) reprimary constant, however the quantity of money demanded will decrease.C) change to the left.D) change to the appropriate.
If Congress imposes a $5 tax on each ATM transactivity, the demand for money willlikely:A) rise.B) decrease.C) fluctuate randomly.D) be unaffected.
If Congress areas a $5 taxation on each ATM transaction, there will certainly most likely be:A) a motion up a stationary money demand curve.B) a movement down a stationary money demand also curve.C) a transition to the left of the money demand curve.D) a shift to the right of the money demand also curve.
Now that quick food locations such as McDonald"s are accepting credit card payments, the:A) demand also for money has boosted.B) demand for money has actually reduced.C) demand also for money has actually not been influenced.D) supply of money has enhanced, as some cash is unused.
U. financial institutions did not offer interest on checking accounts till the start of the 1980s.Then banking regulations readjusted, enabling banks to pay interest on checking accountfunds. As a result, the _ money _ and shifted the money demand curve to the_____.A) supply of; fell; leftB) demand for; fell; leftC) demand also for; rose; rightD) supply of; rose; right
If the accumulation price level doubles:A) the money supply will certainly additionally double.B) neither money demand also nor the money supply will rise.C) both money demand and the money supply will increase proportionally.D) money demand also at any kind of provided interest price will also double.
Suppose a typical basket of items is now more expensive than it offered to be. All elseequal, we would certainly expect:A) the demand for money to shift inward.B) a downward motion along a fixed money demand also curve.C) the demand also for money to transition outward.D) an upward motion along a solved money demand also curve.
Suppose that the economy enters a recession and real GDP falls. All else equal, wewould certainly expect:A) the money demand curve to transition inward.B) the money demand also curve to change external.C) a downward movement along a solved money demand curve.D) an upward activity along a solved money demand also curve.
Eincredibly year more and even more purchases are made via credit cards on the Web. Giventhis trend, all else equal, we would expect:A) the money demand curve to shift outward.B) the money demand also curve to transition inward.C) a downward motion along a addressed money demand curve.D) an upward movement alengthy a solved money demand also curve.
The demand for money is higher in Japan than in the United States because:A) Japanese banks pay interest on checking accounts.B) most stores in Japan carry out not accept credit cards.C) the ATMs are open all night.D) the average price level is lower in Japan.
The demand for money is higher in Japan than in the United States because:A) teleinteractions and indevelopment innovation is even more advanced in the United States than in Japan.B) Japanese consumers usage credit cards even more than human being in the United States.C) Japanese interemainder rates are better than those in the USA.D) Japanese interest prices are lower than those in the USA.
Which of the complying with is NOT among the factors that the Japanese tend to save largequantities of cash?A) Banks have invested heavily in credit card modern technology.B) Japan has a low crime price.C) Interest prices in Japan have been listed below 1% since the 1990s.D) Japan"s retail sector is dominated by mom-and-pop stores that don"t accept credit cards.
A high demand also for money (as in Japan) would certainly outcome from:A) a decrease in nominal GDP and also a high crime rate.B) a decrease in real GDP and a choice from businesses to accept just delittle cards.C) a decrease in the price level.D) low crime rates and also widespcheck out lack of capacity to accept noncash payments.
If the interest rate on CDs rises from 5% to 10%, the chance price of holding moneywill certainly _ and the quantity demanded of money will certainly _.A) increase; decreaseB) increase; increaseC) decrease; increaseD) decrease; decrease
If the equilibrium interest rate in the money sector is 5%, then at an interest rate of 2%,money demanded is _____ than money provided.A) much less thanB) greater thanC) equal toD) It is impossible to predict which is greater, money demanded or money gave.
In the liquidity choice design, the money supply is represented by:A) a vertical line.B) an upward-sloping curve with a slope of 1 / V.C) a horizontal line.D) a downward-sloping curve with a slope of 1 / k.
According to the liquidity choice model, if the interest price rises above itsequilibrium worth, the quantity demanded of nonfinancial interest-bearing financialassets _, and also this leads to a _ in the interest price.A) decreases; riseB) increases; fallC) decreases; fallD) increases; rise
If the demand also for money is $100 billion and the supply of money is $200 billion, thenthe interest rate will:A) loss.B) rise.C) remajor unchanged.D) be in equilibrium.
If the demand also for money is $300 billion and also the supply of money is $200 billion, thenthe interemainder price will:A) fall.B) rise.C) reprimary unreadjusted.D) be in equilibrium.
The liquidity preference version supplies the demand also for and also supply of money to determine:A) GDP.B) the price level.C) the interest price.D) nominal output.
At interemainder rates below equilibrium, human being will certainly want to:A) transition their riches right into Treasury bills.B) transition their wide range into money.C) decrease the amount of money that they host.D) make no transforms to their assets.
If the equilibrium interemainder rate in the money sector is 5%, at an interemainder price of 2% thequantity of nonmonetary interest-bearing financial assets demanded is _____ theamount offered.A) much less thanB) better thanC) equal toD) irpertinent to
If the equilibrium interest price in the money sector is 5%, then at an interemainder price of 2%sellers of interest-bearing financial assets _____ interemainder prices to find willing buyers.A) must market higherB) deserve to market lowerC) can market 2%D) Sales of financial assets execute not depfinish on the price offered.
According to the liquidity choice version, the equilibrium interemainder price is determinedby:A) the supply of and demand also for loanable funds.B) the supply of and also demand also for money.C) the level of investment spfinishing and also conserving.D) the International Monetary Fund.
If the interemainder price is below the equilibrium price, the:A) supply of nonmonetary financial assets is better than the demand for them.B) demand also for nonfinancial financial assets is greater than the supply.C) demand also and also supply of money deserve to still be in balance.D) supply of money is better than the demand also.
An increase in the demand also for money through no change in supply will lead to _ in theequilibrium amount of money and also _ in the equilibrium interemainder rate.A) no change; a riseB) no change; a fallC) a decrease; a riseD) an increase; a fall
The idea that the interemainder price is determined by the supply and also demand also for money isknown as:A) the liquidity preference design.B) the quantity concept of money.C) the monetarist concept.D) the loanable funds concept.
The money supply curve is:A) downward sloping.B) vertical.C) upward increasing.D) horizontal.
An increase in the supply of money via no adjust in demand also will lead to a(n) _ inthe equilibrium amount of money and also a _ in the equilibrium interest rate.A) increase; riseB) increase; fallC) decrease; riseD) decrease; fall
A decrease in the supply of money via no adjust in demand for money will certainly lead toa(n) _ in the equilibrium quantity of money and a _ in the equilibrium interestrate.A) increase; riseB) increase; fallC) decrease; riseD) decrease; fall
A sale of Treasury bills by the Federal Reserve _ interest prices and also _ themoney supply.A) raises; increasesB) raises; reducesC) lowers; reducesD) lowers; increases
Suppose the Federal Reserve buys Treasury bills. We deserve to mean this transactivity to_ the money supply, _ Treasury bill prices, and also _____ interest rates.A) reduce; increase; lowerB) increase; lower; lowerC) increase; raise; lowerD) reduce; reduce; raise
Suppose the Federal Reserve sells Treasury bills. We deserve to suppose this transaction to_ the money supply, _ Treasury bill prices, and _____ interest rates.A) reduce; increase; lowerB) increase; lower; lowerC) increase; raise; lowerD) reduce; reduce; raise
Use the adhering to to answer concerns 76-77:
Figure: Changes in the Money Supply
If the taracquire price of interemainder is higher than the equilibrium interest rate, the FederalReserve will certainly _ Treasury bills in the open sector, _ the supply of money, and_____ the interemainder price to the target price.A) sell; increase; lowerB) buy; increase; lowerC) sell; decrease; raiseD) buy; decrease; raise
Suppose the Federal Reserve has set a taracquire for the federal funds rate. If initially theequilibrium interest price happens to be greater than the targain interest price, then theFederal Reserve must _ Treasury bills in the open up industry, _ the moneysupply, transition the supply of money curve to the _, and _ the interest price to thetarobtain rate.A) sell; decrease; left; raiseB) purchase; decrease; left; lowerC) purchase; increase; right; lowerD) sell; increase; left; raise
The federal funds price is:A) identified by the supply of and demand also for money.B) set by Congress.C) figured out in the genuine sector by the accumulation supply and accumulation demand also curves.D) the interemainder price that financial institutions pay once they borrow directly from the Fed.
If the Federal Reserve desires to reduced interest rates, it deserve to _ the money supply by_ Treasury bills.A) decrease; sellingB) decrease; buyingC) increase; sellingD) increase; buying
To expand the money supply, the Federal Reserve would have actually to:A) make an open up purchase of Treasury bills.B) have an open sale of Treasury bills.C) raise interemainder rates.D) obtain approval from Congress.
According to the liquidity choice version, a _ in the money supply shifts themoney supply curve to the _ and also increases the equilibrium interest price.A) decrease; rightB) increase; leftC) decrease; leftD) increase; right
The Federal Reserve affects interemainder prices by:A) setting them via regulations.B) open up market operations that shift the money demand also curve.C) open market operations that shift the money supply curve.D) transforming tax rates.
The Federal Open Market Committee sets the targain interemainder rate for the next:A) 3 months.B) 6 months.C) 3 weeks.D) six weeks.
To reduced the temporary interest rate, the Federal Reserve can:A) buy Treasury bills.B) offer Treasury bills.C) tell the financial institutions to make more loans.D) tell the financial institutions to make fewer loans.
When the Federal Reserve buys Treasury bills, this leads to:A) a decrease in the money supply.B) a boost in the money supply.C) an increase in short-lived interest prices.D) a boost in the Federal Reserve funds rate.
Assume the money sector is in equilibrium. The Federal Reserve Bank has actually determined topurchase Treasury bills in an open up sector procedure. The outcome of this activity will be a_ in the interemainder price as the money _ shifts _____.A) fall; supply curve; outwardB) fall; supply curve; inwardC) fall; demand curve; inwardD) rise; demand also curve; outwardIn September 2007, reversing its course, the Federal Reserve began a series of:A) interemainder price rises, reversing its previous plan of lowering interemainder rates to fight the financial crisis.B) interemainder price boosts to combat inflation.C) cuts in the reserve needs, reversing its previous policy of boosting the reserve need, to stop financial institution failures.D) cuts in the federal funds taracquire price to lower the interest price, reversing its previous policy of increasing interemainder rates, to fight the financial crisis.
Use the following to answer concerns 99-101:
Figure: Money Market I
(Figure: Money Market I) Look at the number Money Market I. If the money sector isinitially in equilibrium at point E and the central bank sells Treasury bills, then theinteremainder rate will:A) relocate towards suggest H.B) move toward suggest L.C) remajor at allude E.D) change rightward.
(Figure: Money Market I) Look at the number Money Market I. If the money sector isinitially in equilibrium at allude E and also the main financial institution buys Treasury bills, then theinterest price will:A) relocate toward suggest H.B) move towards point L.C) remain at point E.D) change leftward.
(Figure: Money Market I) Look at the figure Money Market I. If the interest rate is at rLand the central bank neither buys nor sells Treasury bills, then the interemainder rate will:A) move towards point H.B) relocate toward allude L.C) relocate toward allude E.D) not adjust.
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According to the liquidity preference model, if the Federal Reserve rises the moneysupply, the equilibrium interest price _, and this leads to a(n) _ in the quantitydemanded of nonfinancial interest-bearing financial assets.A) rises; increaseB) falls; decreaseC) rises; decreaseD) falls; increase
Other points equal, increasing interest rates result in a _ in investment spfinishing and also a_ in _____ spending.A) fall; fall; consumerB) rise; rise; consumerC) fall; rise; consumerD) fall; rise; investment
Expansionary monetary policy _ the money supply, _ interest prices, and also _____consumption and also investment spfinishing.A) increases; increases; increasesB) decreases; decreases; decreasesC) increases; decreases; increasesD) decreases; increases; decreases
Monetary policy that lowers the interemainder price is referred to as _ bereason it _.A) contractionary; intends to head off inflationB) expansionary; increases short-run accumulation supplyC) contractionary; reduces saving and also boosts consumptionD) expansionary; rises aggregate demand
The primary objective of contractionary financial policy is to:A) decrease accumulation demand also.B) cshed a recessionary gap.C) boost investment.D) raise the level of potential output.