Question : 81) On any given day, ________ changes to achieve equilibrium : 1240484

 

 

81) On any given day, ________ changes to achieve equilibrium in the money market.

A) real GDP

B) the price level

C) the inflation rate

D) the nominal interest rate

E) the real interest rate

82) Every day, ________ changes to make the quantity of money demanded equal the quantity of money supplied.

A) real GDP

B) the money supply

C) the price level

D) the nominal interest rate

E) the inflation rate

 

83) In the money market, if the nominal interest rate is below the equilibrium level,

A) the quantity of money demanded exceeds the quantity of money supplied.

B) the quantity of money supplied exceeds the quantity of money demanded.

C) asset prices will rise.

D) the demand for money curve will shift leftward.

E) the supply of money curve will shift leftward.

 

84) Suppose that the equilibrium nominal interest rate is 4 percent and the equilibrium quantity of money is $1 trillion. At any interest rate above 4 percent,

A) less than $1 trillion will be demanded and bond prices will increase.

B) less than $1 trillion will be demanded and bond prices will fall.

C) more than $1 trillion will be supplied and bond prices will fall.

D) more than $1 trillion will be supplied and the interest rate will rise.

E) there is a shortage of money and the interest rate will rise.

85) Suppose that the equilibrium nominal interest rate is 5 percent and the equilibrium quantity of money is $1 trillion. At any interest rate below 5 percent,

A) the interest rate will rise and bond prices will fall.

B) the interest rate will fall and bond prices will fall.

C) there will be a surplus of money and bond prices will fall.

D) there will be a surplus of money and bond prices will increase.

E) the supply of money will decrease.

 

86) If the quantity of money demanded is greater than the quantity supplied, then in the short run the

A) demand for financial assets increases.

B) nominal interest rate falls.

C) nominal interest rate rises.

D) price of financial assets rises.

E) price level rises.

 

87) If the nominal interest rate is less than the equilibrium nominal interest rate determined in the money market, then households and firms

A) are holding more money than they prefer.

B) are holding less money than they prefer.

C) expect the nominal interest rate to decrease.

D) expect the price level to increase.

E) expect real GDP to increase.

88) If the nominal interest rate is less than the equilibrium nominal interest rate determined in the money market, then in the short run households and firms

A) sell financial assets.

B) buy financial assets.

C) raise the price level.

D) lower the price level.

E) increase real GDP.

 

89) When households and firms sell financial assets, such as government securities, the

A) nominal interest rate falls.

B) market price of the securities increases.

C) nominal interest rate rises.

D) demand for money curve shifts leftward.

E) supply of money curve shifts leftward.

 

90) When the nominal interest rate is ________ the equilibrium interest rate, the quantity of money demanded is less than the quantity of money supplied; when the nominal interest rate is ________ the equilibrium interest rate, the quantity of money demanded exceeds the quantity of money supplied.

A) less than; greater than

B) equal to; less than

C) greater than; equal to

D) greater than; less than

E) equal to; greater than

 

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