978-1259723223 Test Bank TBChap036 Part 7

subject Type Homework Help
subject Pages 14
subject Words 3312
subject Authors Campbell McConnell, Sean Flynn, Stanley Brue

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purposes is $800 billion, it can generally be concluded that
269.
A decrease in the interest rate will cause a(n)
270.
Which of the following varies directly with the interest rate?
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36-122
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
market for money.
Test Bank: II
Topic: Interest Rates
271.
A wealthy executive is holding money, waiting for a good time to invest in the stock
market. This action would be an example of the
272.
There is an asset demand for money primarily because of which function of money?
273.
An increase in nominal GDP will
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36-123
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
AACSB: Knowledge Application
A c c e s s i b i l i t y : Keyboard Navigation
Blooms: Understand
D i f f i c u l t y : 02 Medium
Learning Objective: 36-01 Discuss how the equilibrium interest rate is determined in the
market for money.
Test Bank: II
Topic: Interest Rates
274.
Which line in the graph would best illustrate the transactions demand for money curve?
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275.
Which line in the graph would best illustrate the asset demand for money curve?
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276.
Which line in the graph would best illustrate the supply of money curve?
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277.
Refer to the graph, in which Dt is the transactions demand for money, Dm is the total
demand for money, and Sm is the supply of money. If the
interest rate was 4 percent, the
asset demand for money would be
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278.
Refer to the graph, in which Dt is the transactions demand for money, Dm is the total
demand for money, and Sm is the supply of money. The market
is initially in equilibrium at
a 6 percent interest rate. If the money supply increases, then Sm2 will shift to
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279.
Refer to the graph, in which Dt is the transactions demand for money, Dm is the total
demand for money, and Sm is the supply of money. The market
is in equilibrium at the 6
percent rate of interest. If the money supply then decreases as shown, the transaction demand
for money will change by
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36-129
280.
Refer to the graph, in which Dt is the transactions demand for money, Dm is the total
demand for money, and Sm is the supply of money. The market
is initially in equilibrium at
a 6 percent rate of interest. If the supply of money increases as shown, then the asset demand
for money will increase
by
281.
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Interest
Rate
7%
6
5
4
Suppose that the transactions demand for money is equal to 20 percent of the nominal GDP,
the supply of money is $800 billion, and the asset
demand for money is that shown in the
table. If the nominal GDP is $2,000 billion, the equilibrium interest rate is
282.
Interest
Rate
7%
6
5
4
Refer to the table. Suppose that the transactions demand for money is $300 billion and the
money supply is $700 billion. A decrease in the money
supply to $600 billion would cause
the interest rate to
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36-131
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
B.
rise to 6 percent.
C.
fall to 4 percent.
D.
fall to 5 percent.
283.
Refer to the graph, which shows the supply and demand for money, where Dm1, Dm2, and
Dm3 represent different demands for money and Sm1, Sm2,
and Sm3 represent different
levels of the money supply. The initial equilibrium point is A. What will be the new
equilibrium point following an
autonomous increase in the asset demand for money?
page-pfc
36-132
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
AACSB: Knowledge Application
A c c e s s i b i l i t y : Keyboard Navigation
Blooms: Understand
D i f f i c u l t y : 02 Medium
Learning Objective: 36-01 Discuss how the equilibrium interest rate is determined in the
market for money.
Test Bank: II
Topic: Interest Rates
Type: Graph
284.
Refer to the graph, which shows the supply and demand for money, where Dm1, Dm2, and
Dm3 represent different demands for money and Sm1, Sm2,
and Sm3 represent different
levels of the money supply. The initial equilibrium point is A. What will be the new
equilibrium point following a
decrease in the transactions demand for money?
page-pfd
36-133
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
D i f f i c u l t y : 02 Medium
Learning Objective: 36-01 Discuss how the equilibrium interest rate is determined in the
market for money.
Test Bank: II
Topic: Interest Rates
Type: Graph
285.
Refer to the graph, which shows the supply and demand for money, where Dm1, Dm2, and
Dm3 represent different demands for money and Sm1, Sm2,
and Sm3 represent different
levels of the money supply. The initial equilibrium point is A. What will be the new
equilibrium point following a
decrease in the money supply?
page-pfe
36-134
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Topic: Interest Rates
Type: Graph
286.
When the interest rate falls, the
287.
In which case would the quantity of money demanded by the public tend to increase by
the greatest amount?
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288.
Refer to the graph. If the supply of money was $200 billion, the interest rate would be
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289.
Refer to the graph. If the equilibrium interest rate is 4 percent, the supply of money must be
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290.
Refer to the graph. If the interest rate rises from 2 percent to 3 percent, the supply of money
must have
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291.
Refer to the graph. If the initial equilibrium interest rate was 5 percent and the money supply
increased by $100 billion, then the new interest rate
would be
292.
The interest rate will fall when the
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Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
D.
supply of money decreases.
293.
Assume that the stock of money is determined by the Federal Reserve and does not
change when the interest rate changes. This situation means that
the
294.
An increase in the money supply is likely to reduce
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295.
Disequilibrium in the money market is mainly corrected via a change in
297.
If bond prices decrease, then the

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