Question : 101) In the above figure, the equilibrium interest rate ________ : 1227859

 

 

101) In the above figure, the equilibrium interest rate is ________ and the equilibrium quantity of money is ________ trillion.

A) 8 percent; $1.2

B) 4 percent; $0.6

C) 4 percent; $1.2

D) 8 percent; $0.6

E) 0 percent; $1.2

102) In the above figure, if the interest rate is 3 percent per year, the quantity of money demanded is

A) less than the quantity of money supplied, and the interest rate will change.

B) greater than the quantity of money supplied, and the interest rate will change.

C) less than the quantity of money supplied,and the demand for money curve will shift.

D) greater than the quantity of money supplied, and the demand for money curve will shift.

E) greater than the quantity of money supplied, and the supply of money curve will shift.

 

103) In the above figure, if the interest rate is 2 percent per year, the quantity of money demanded is

A) less than the quantity of money supplied, and the interest rate will change.

B) greater than the quantity of money supplied, and the interest rate will change.

C) less than the quantity of money supplied, and the demand for money curve will shift.

D) greater than the quantity of money supplied, and the demand for money curve will shift.

E) greater than the quantity of money supplied, and the supply of money curve will shift.

 

 

104) The above table has the demand and supply schedules for money. What is the equilibrium nominal interest rate?

A) 5 percent

B) 9 percent

C) 8 percent

D) 7 percent

E) 6 percent

105) The above table has the demand and supply schedules for money. If the Fed increases the quantity of money by $0.1 trillion, the new equilibrium nominal interest rate is

A) 8 percent.

B) 9 percent.

C) 7 percent.

D) 5 percent.

E) 6 percent.

 

106) The above table has the demand and supply schedules for money. Real GDP increases and, as a result, the demand for money increases by $0.2 trillion at each level of the nominal interest rate. The new equilibrium interest rate is

A) 3 percent.

B) 4 percent.

C) 5 percent.

D) 6 percent.

E) 2 percent.

 

107) The quantity of money demanded

A) is infinite.

B) has no opportunity cost.

C) is the quantity that balances the benefit of holding an additional dollar of money against the opportunity cost of doing so.

D) is directly controlled by the Fed.

E) changes very infrequently.

108) Which of the following statements is correct?

A) Nominal interest rate = Real interest rate – Inflation rate

B) Nominal interest rate = Real interest rate + Inflation rate

C) Nominal interest rate = Inflation rate – Real interest rate

D) Nominal interest rate = Inflation rate + Price index

E) Nominal interest rate = Inflation rate ÷ Real interest rate

 

109) The opportunity cost of holding money is the

A) real interest rate.

B) nominal interest rate.

C) inflation rate.

D) time it takes to go to the ATM or bank.

E) growth rate of real GDP.

 

110) The demand for money curve shows the relationship between the quantity of money demanded and

A) the nominal interest rate.

B) the real interest rate.

C) the inflation rate.

D) real GDP.

E) nominal GDP.

 

111) The demand for money ________ when the ________.

A) increases; price level increases

B) decreases; price level increases

C) remains constant; price level increases

D) increases; nominal interest rate increases

E) increases; supply of money decreases

112) Every day ________ adjusts to make the quantity of money demanded equal the quantity of money supplied.

A) the inflation rate

B) the nominal interest rate

C) the quantity of money

D) potential GDP

E) real GDP

 

113) If the nominal interest rate is above its equilibrium value, then

A) people sell financial assets and the interest rate falls.

B) people buy financial assets and the interest rate falls.

C) the demand curve for money shifts rightward and the interest rate rises.

D) the supply curve of money shifts leftward and the interest rate rises.

E) the demand curve for money shifts leftward and the interest rate falls.

 

114) When the Fed increases the quantity of money, the

A) equilibrium nominal interest rate falls.

B) equilibrium nominal interest rate rises.

C) demand for money curve shifts rightward.

D) supply of money curve shifts leftward.

E) demand for money curve shifts leftward.