Question : 31) When the nominal interest rate falls, there is A) an : 1227884

31) When the nominal interest rate falls, there is

A) an upward movement along the demand for money curve.

B) a downward movement along the demand for money curve.

C) a rightward shift of the demand for money curve.

D) a leftward shift of the demand for money curve.

E) no movement along the demand for money curve and the curve does not shift.

32) An increase in the nominal interest rate leads to a

A) rightward shift in the demand for money curve.

B) movement upward along the demand for money curve.

C) leftward shift in the demand for money curve.

D) movement downward along the demand for money curve.

E) neither a shift in nor a movement along the demand for money curve.

33) The demand for money curve slopes downward because a rise in the nominal interest rate ________ the opportunity cost of holding money and therefore ________ the quantity of money demanded.

A) increases; increases

B) increases; decreases

C) decreases; increases

D) decreases; decreases

E) increases; does not change

34) The demand for money schedule shows the ________ relationship between money demand and the nominal interest rate which means that as the ________.

A) negative; nominal interest rate increases, the opportunity cost of holding money increases

B) negative; nominal interest rate increases, the opportunity cost of holding money decreases

C) positive; nominal interest rate increases, the opportunity cost of holding money increases

D) positive; nominal interest rate increases, the opportunity cost of holding money decreases

E) negative; the opportunity cost of holding money increases, the nominal interest rate increases

35) When the nominal interest rate increases, the

A) quantity of money demanded increases and there is a movement upward along the demand for money curve.

B) quantity of money demanded decreases and there is a movement upward along the demand for money curve.

C) demand for money increases and the demand for money curve shifts rightward.

D) demand for money decreases and the demand for money curve shifts leftward.

E) supply of money curve shifts rightward.

36) As the nominal interest rate increases, the opportunity cost of holding money ________ and the quantity of money demanded ________.

A) increases; increases

B) increases; decreases

C) decreases; increases

D) decreases; decreases

E) increases; does not change because people need money

37) If the interest rate rises from 1 percent to 3 percent, the ________ decreases and the opportunity cost of holding money ________.

A) quantity of money demanded; rises

B) quantity of money demanded; falls

C) quantity of money supplied; rises

D) quantity of money supplied; falls

E) demand for money; rises

38) In 2009, the interest rate fell below 1 percent in the United States. As a result, there was a

A) leftward shift in the supply of money curve.

B) rightward shift in the demand for money curve.

C) movement downward along the demand for money curve.

D) movement upward along the demand for money curve.

E) movement upward along the money supply curve.

39) As the economy enters a strong expansion in which real GDP increases, which of the following occurs?

A) The demand for money curve shifts rightward.

B) The demand for money curve shifts leftward.

C) The demand for money decreases and there is a movement upward along the demand for money curve.

D) The demand for money increases and there is a movement downward along the demand for money

curve.

E) The nominal interest rate falls as the demand for money curve shifts leftward.

40) The quantity of money demanded is proportional to

A) the inflation rate.

B) real GDP.

C) the price level.

D) the real interest rate.

E) the nominal interest rate.