41) 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.
42) The demand for money is
A) positively related to the price level.
B) positively related to the nominal interest rate.
C) negatively related to the price level.
D) negatively related to real GDP.
E) positively related to the real interest rate.
43) If the price level increases, the
A) demand for money increases.
B) demand for money decreases.
C) quantity of money demanded increases.
D) quantity of money demanded decreases.
E) demand for money does not change and the quantity of money demanded does not change.
44) Suppose that the price level does not change while real GDP decreases. As a result,
A) the demand for money increases and the demand for money curve shifts rightward.
B) the supply of money curve shifts leftward.
C) the supply of money curve shifts rightward.
D) the quantity of money demanded decreases and there is a movement downward along the demand for money curve.
E) the demand for money decreases so that households and firms hold smaller amounts of money.
45) When the price level increases, people demand ________ money and the demand for money curve ________.
A) more; shifts rightward
B) more; shifts leftward
C) less; shifts rightward
D) less; shifts leftward
E) the same amount of; does not shift
46) The demand for money increases and the demand for money curve shifts rightward if
A) the real interest rate increase.
B) the nominal interest rate increases.
C) the price level increases.
D) the inflation rate increases.
E) real GDP decreases.
47) If the price level rises, there is
A) an upward movement along the demand for money curve and the curve does not shift.
B) a downward movement along the demand for money curve and the curve does not shift.
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 curve for money and the curve does not shift.
48) If the price level falls, the
A) demand for money increases.
B) demand for money decreases.
C) quantity of money demanded increases.
D) quantity of money demanded decreases.
E) demand for money does not change and the quantity of money demanded does not change.
49) The ________ the price level, the ________.
A) higher; greater the demand for money
B) higher; smaller the demand for money
C) lower; greater the demand for money
D) higher; greater the supply of money
E) higher; smaller the supply of money
50) An increase in the price level leads to a
A) rightward shift in the demand for money curve.
B) movement upward along the demand for money curve and no shift of the curve.
C) leftward shift in the demand for money curve.
D) movement downward along the demand for money curve and no shift of the curve.
E) rightward shift of the supply of money curve.
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