Question : 71) In the above figure, a movement from point A : 1238109

 

 

71) In the above figure, a movement from point A to point B represents

A) an increase in the demand for money that might be the result of an increase in real GDP.

B) a decrease in the demand for money that might be the result of a fall in the price level.

C) a decrease in the quantity of money demanded.

D) an increase in the quantity of money demanded.

E) an increase in the demand for money that might be the result of a fall in the price level.

72) In the above figure, a movement from point B to point C represents

A) an increase in the demand for money that might be the result of an increase in real GDP.

B) a decrease in the demand for money that might be the result of an increase in real GDP.

C) a decrease in the quantity of money demanded.

D) an increase in the quantity of money demanded.

E) an increase in the demand for money that might be the result of a fall in the price level.

73) From 1970 to 2010, as a fraction of GDP, the quantity of money that people and businesses have held has been

A) decreasing.

B) increasing.

C) fluctuating erratically.

D) independent of people’s use of credit cards.

E) changing only as the interest rate changed.

74) Since 1970, as a percent of GDP, M1 held has steadily decreased. Which of the following can account for this fact?

A) Real GDP has increased since 1970.

B) The price level has risen since 1970.

C) Credit cards have become more widely available since 1970.

D) The nominal interest rate has steadily risen since 1970.

E) The nominal interest rate has steadily fallen since 1970.

75) In the United States since 1970, the quantity of M1 money people hold as a percentage of GDP has

A) increased.

B) decreased.

C) remained constant.

D) increased at first and the decreased.

E) decreased at first and then increased.

76) As a result of increased use of credit cards,

A) the demand for money has decreased and the demand for money curve has shifted leftward.

B) the demand for money has decreased and there has been a movement up along the demand for money curve.

C) the demand for money has decreased and there has been a movement down along the demand for money curve.

D) the equilibrium nominal interest rate has increased and bond prices have decreased. 

E) the equilibrium nominal interest rate has decreased and bond prices have fallen.

77) From 1970 to 2007 the quantity of M1 fell from 20 percent of GDP to less than 10 percent. This change is because the ownership of credit cards ________ during this time period since ________.

A) expanded from 18 percent to 76 percent; credit cards became more widely available and utilized

B) fell from 76 percent to 18 percent; credit cards became less widely available and utilized

C) remained unchanged; credit cards do not affect the quantity of money

D) fell from 76 percent to 18 percent; there were several recessions during that period

E) expanded from 18 percent to 76 percent; there were several recessions during that period

78) From 1970 to 2007 households held ________ because ________.

A) less money relative to income; people began using credit cards more often

B) less money relative to income; people began using credit cards less often

C) less money relative to income; the price level began to rise

D) more money relative to income; people began using credit cards more often

E) more money relative to income; people began using credit cards less often

79) The supply of money curve is

A) upward sloping, showing the influence of the interest rate.

B) horizontal because interest rates are fixed at any one moment.

C) vertical because the quantity of money is fixed at any one moment.

D) downward sloping, showing the negative influence of the interest rate.

E) horizontal because the Fed controls the quantity of money supplied.

80) In the demand and supply model of the money market, the

i.supply of money curve is a vertical straight line.

ii.supply of money is the quantity that must be held by households and firms.

iii.quantity of money is determined by Fed actions.

A) i only

B) ii only

C) iii only

D) ii and iii

E) i, ii, and iii

 

 

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