Question :
71.RefertoFigure34-2.Assumethemoneymarketisalwaysinequilibrium,andsupposer1=0.08;r2=0.12;Y1=13,000;Y2=10,000;P1=1.0;andP2=1.2.Whichofthefollowingstatementsiscorrect?
a.Whenr=r2,nominaloutputishigherthani : 1262191
71.RefertoFigure34-2.Assumethemoneymarketisalwaysinequilibrium,andsupposer1=0.08;r2=0.12;Y1=13,000;Y2=10,000;P1=1.0;andP2=1.2.Whichofthefollowingstatementsiscorrect?
a.Whenr=r2,nominaloutputishigherthanitiswhenr=r1.
b.Whenr=r2, realoutput ishigher thanitis whenr=r1.
c.Whenr=r2,theexpectedrateofinflationishigherthanitiswhenr=r1.
d.Ifthevelocityofmoneyis4whenr=r2,then the quantityof money is$3,000.
72.RefertoFigure34-2.Assumethemoneymarketisalwaysinequilibrium,andsupposer1=0.08;r2=0.12;Y1=13,000; Y2=10,000;P1=1.0;andP2=1.2.Whichofthefollowingstatementsiscorrect?WhenP=P2,
a.investmentislowerthanitiswhenP=P1.
b.nominaloutputishigherthanitiswhenP=P1.
c.theexpectedrateofinflationishigherthanitiswhenP=P1.
d.the velocityof moneyis higherthan itiswhenP=P1.
Figure34-3
73.RefertoFigure34-3.Whatquantityisrepresentedbythedownward-slopinglineontheleft-handgraph?
a.thesupplyofmoney
b.thedemandformoney
c.therateofinflation
d.AggregateDemand.
74.RefertoFigure34-3.Whichofthefollowingsequences(numberedarrows)showsthelogicoftheinterest-rateeffect?
a.1,2,3,4
b.1,4,3,2
c.3,4,2,1
d.3,2,1,4
75.RefertoFigure34-3.ForaneconomysuchastheUnitedStates,whatcomponentofthedemandforgoodsandservicesismostresponsibleforthedecreaseinoutputfromY1toY2?
a.consumption
b.investment
c.netexports
d.governmentspending
76.Accordingtoliquiditypreferencetheory,ifthequantityofmoneydemandedisgreaterthanthequantitysupplied,thentheinterestratewill
a.increaseandthequantityofmoneydemandedwilldecrease.
b.increaseandthequantityofmoneydemandedwillincrease.
c.decreaseandthequantityofmoneydemandedwilldecrease.
d.decreaseandthequantityofmoneydemandedwillincrease.
77.Whenhouseholdsfindthemselvesholdingtoomuchmoney,theyrespondby
a.purchasinginterest-earningfinancialassetsandinterestratesfall.
b.purchasinginterest-earningfinancialassetsandinterestratesrise.
c.holdingtheextramoneyandinterestratesrise.
d.sellinginterest-earningfinancialassets,whicheliminatestheexcesssupplyofmoney.
78.Accordingtoliquiditypreferencetheory,ifthequantityofmoneysuppliedisgreaterthanthequantitydemanded,thentheinterestratewill
a.increaseandthequantityofmoneydemandedwilldecrease.
b.increaseandthequantityofmoneydemandedwillincrease.
c.decreaseandthequantityofmoneydemandedwilldecrease.
d.decreaseandthequantityofmoneydemandedwillincrease.
79.Accordingtoliquiditypreferencetheory,iftherewereasurplusofmoney,then
a.theinterestratewouldbeaboveequilibriumandthequantityofmoneydemandedwouldbetoolargeforequilibrium.
b.theinterestratewouldbeaboveequilibriumandthequantityofmoneydemandedwouldbetoosmallforequilibrium.
c.theinterestratewouldbebelowequilibriumandthequantityofmoneydemandedwouldbetoosmallforequilibrium.
d.theinterestratewouldbebelowequilibriumandthequantityofmoneydemandedwouldbetoolargeforequilibrium.
80.Theinterestratewouldfallandthequantityofmoneydemandedwould
a.increaseiftherewereasurplusinthemoneymarket.
b.increaseiftherewereashortageinthemoneymarket.
c.decreaseiftherewereasurplusinthemoneymarket.
d.decreaseiftherewereashortageinthemoneymarket.