The standard determinant of the transactions demand also for money is the:A. price levelB. interest rateC. level of nominal GDPD. reserve ratio
The standard determinant of the asset demand also for money is the:A. interest rateB. price levelC. reserve ratioD. level of nominal GDP
Total money demand also is the:A. vertical amount of the private money demand and the public money demandB. horizontal amount of transactivity money demand also and ascollection money demandC. vertical amount of transaction money demand and asset money demandD. horizontal sum of consumer money demand and producer money demand
The equilibrium interest price is determined:A. at the interarea of the accumulation demand and also aggregate supply curveB. by the FedC. to fluctuate over timeD. at the intersection of the full demand also for money curve and also the supply of money curve
Suppose tbelow is a rise in the full demand for money. In this case, the:A. money supply will certainly riseB. equilibrium interest price will certainly fallC. money supply will certainly fallD. equilibrium interest rate will rise
The basic objective of monetary plan is to:A. increase employment and also stabilize exreadjust ratesB. help the economic situation in achieving a full-employment, non-inflationary level of full outputC. maintain secure exreadjust prices and also lower inflationD. remove inflation and reduced interemainder rates
A significant strength of monetary policy is:A. the dominion offered to manage the economyB. its long term consequencesC. its speed and also flexibilityD. the autonomy of the Fed
Monetary policy is simpler to conduct than fiscal policy because:A. the Fed has more control of the economyB. the economic climate responds better to monetary policy than fiscal policyC. monetary plan has actually a much shorter bureaucratic lag than fiscal policyD. monetary policy is much easier to understand
The Federal funds rate is:A. the interemainder rate the government charges for government loans, whereas the prime interemainder rate is the interemainder price banks readjust on loans to their the majority of creditworthy customersB. the interest rate the banks charge on loans to their many creditworthy customers, whereas the prime interemainder rate is the interemainder price financial institutions charge one one more on overnight loans.C. the interest price the Fed charges banks for a loan, whereas the prime interest price is the interest rate banks charge one another on overnight loansD. the interest rate the banks charge one one more on overnight loans, whereas the prime interemainder rate is the interest rate financial institutions readjust on loans to their a lot of creditworthy customers.

You are watching: The asset demand for money quizlet


The Federal funds rate is:A. reduced than the prime interest rate bereason federal funds are loaned overnightB. not comparable to the prime interemainder price because the lenders are various.C. practically the exact same as the prime interest price bereason they are both brief term loansD. greater than the prime interest rate bereason it is more riskies to lend overnight.
Changes in the Federal funds price and the prime interemainder price very closely track one one more because:A. both rates are regarded the loved one scarcity or availcapacity of reserves.B. there are fewer prime rate reserves available for lending.C .the Fed ararrays this to be the caseD. all interemainder prices will be equal whether the customers are financial institutions, businesses, or households.
A decrease in the supply of Federal funds is presented as an upchange of the supply curve above bereason the interest rate:A. rises to 4.5% which occurs when there are more funds availableB. falls to 3.5% which occurs when tbelow are more funds available.C. rises to 4.5% which occurs as soon as tbelow are fewer funds availableD. falls to 3.5% which occurs when there are fewer funds accessible.
Suppose that you are a member of the Board of Governors of the Federal Reserve System. The economic situation is enduring a sharp rise in the inflation price. In this situation the Federal funds rate must be:A. increased.B. set at zero.C. decreased.D. set equal to the discount rate.
Suppose that you are a member of the Board of Governors of the Federal Reserve System. The economy is enduring a sharp rise in the inflation price. You recommfinish a contractivity of the money supply by: A. boosting the reserve proportion or decreasing the discount price and also marketing bonds.B. decreasing the reserve proportion or discount rate and also buying bonds.C. increasing the reserve ratio or discount price or offering bondsD. decreasing the reserve ratio, raising the discount rate, or buying bonds.
Suppose that you are a member of the Board of Governors of the Federal Reserve System. The economic climate is experiencing a sharp rise in the inflation price. You recommfinish a contractivity of the money supply which would:A. boost the lfinishing capability of the banking device, decrease the real interemainder price, and also mitigate investment spfinishing, aggregate demand, and inflation.B. rise the lfinishing capability of the banking mechanism, decrease the real interest price, and also boost investment spfinishing, aggregate demand also, and inflation.C. alleviate the lfinishing ability of the banking mechanism, rise the actual interemainder rate, and mitigate investment spending, aggregate demand also, and also inflation.D. alleviate the lfinishing capacity of the banking device, decrease the genuine interemainder price, and rise investment spending, aggregate demand, and inflation.
If there is a rise in the nation"s money supply, the interemainder rate will:A. loss, investment spfinishing will certainly increase, accumulation demand also will transition appropriate, and genuine GDP and also the price level will rise.B. increase, investment spending will certainly autumn, accumulation demand will change ideal, actual GDP will certainly climb, and also the price level will certainly autumn.C. increase, investment spending will autumn, accumulation demand also will change right, genuine GDP will fall, and also the price level will rise.D. autumn, investment spfinishing will certainly increase, accumulation demand will certainly change appropriate, actual GDP will certainly increase, and the price level will autumn.
When economists say that financial policy can exhilittle bit cyclical asymmetry, this means:A. recessions are shorter than inflations.B. expansionary and also restrictive financial policy do not have actually the exact same potential for financial development and also contraction.C. expansionary and restrictive financial plan cannot both be provided for financial expansion and contractivity.D. the Fed is only able to deal with inflation.
Cyclical asymmeattempt is necessary to policymakers because:A. recessions are shorter than inflations.B. monetary plan is even more reliable in fighting inflation than recession.C. financial plan is more efficient in fighting recession than inflation.D. fiscal policy is even more reliable in fighting inflation than recession.
B
When bond prices go up, interest rates go ___________. A. Nowhere.B. Down.C. Up.
B
A commercial financial institution sells a Treasury bond to the Federal Reserve for $100,000. The money supply: A. Decreases by $100,000.B. Increases by $100,000.C. Is unimpacted by the transaction.
A bank presently has actually $100,000 in checkable deposits and $15,000 in actual reserves. If the reserve ratio is 20 percent, the bank has actually ________ in money-creating potential. If the reserve ratio is 14 percent, the financial institution has actually __________ in money-creating potential. A. $3,000; $2,100.B. -$5,000; $1,000.C. $5,000; $1,000.D. $20,000; $14,000.
A bank borrows $100,000 from the Fed, leaving a $100,000 Treasury bond on deposit with the Fed to serve as collateral for the loan. The discount rate that uses to the loan is 4 percent and also the Fed is currently mandating a reserve proportion of 10 percent. How much of the $100,000 obtained by the financial institution should it store as required reserves? A. $100,000.B. $4,000.C. $0.D. $10,000.
Which of the complying with Fed actions will certainly boost bank lending? A. The Fed raises the discount rate from 5 percent to 6 percent.B. The Fed lowers the discount price from 4 percent to 2 percent.C. The Fed raises the reserve proportion from 10 percent to 11 percent.D. The Fed buys $400 million worth of Treasury bonds from commercial financial institutions.
If the Federal Reserve wants to increase the federal funds price utilizing open-industry operations, it have to _____________ bonds. A. Sell.B. Buy.
True or False: A liquidity trap occurs as soon as expansionary financial policy stops working to work bereason a rise in bank reserves by the Fed does not result in a boost in bank lfinishing.

See more: Why Are The Slopes Of Isocost Lines Constant? Comparative Statics For A Cost


True or False: In the USA, financial policy has actually two crucial benefits over fiscal policy: (1) isolation from political pressure and also (2) speed and also adaptability.
})}else;window.location.assign("https://occupychristmas.org/explanations/textbook-solutions/principles-of-economics-8th-edition-9781305585126");">
*

})}else;window.area.assign("https://occupychristmas.org/explanations/textbook-solutions/krugmans-economics-for-ap-2nd-edition-9781464122187");">
*

})}else;window.place.assign("https://occupychristmas.org/explanations/textbook-solutions/krugmans-economics-for-ap-9781429218276");">
*

})}else;home window.location.assign("https://occupychristmas.org/explanations/textbook-solutions/explorations-in-economics-1st-edition-9780716701071");">
*

Explorations in Economicsfirst EditionAlan Krueger
1,281 explanations
Sets uncovered in the exact same folder
home window.occupychristmas.org<"productClickLinkData"> = <"name":"Econ Chapter 33","id":"172003164","price":"","category":"premium content","variant":"study guide","position":"","brand":"agustin703">; QLoad("occupychristmas.org.productClickLinkData"); return;})}elsewindow.occupychristmas.org<"productClickLinkData"> = <"name":"Econ Chapter 33","id":"172003164","price":"","category":"premium content","variant":"study guide","position":"","brand":"agustin703">; QLoad("occupychristmas.org.productClickLinkData"); return;;window.place.assign("https://occupychristmas.org/172003164/econ-chapter-33-flash-cards/");" id="1-172003164">
Econ Chapter 33
34 terms
agustin703
home window.occupychristmas.org<"productClickLinkData"> = <"name":"Eco Ch 14","id":"111139418","price":"","category":"premium content","variant":"research guide","position":"","brand":"jimmy_castillo7">; QLoad("occupychristmas.org.productClickLinkData"); return;})}elsewindow.occupychristmas.org<"productClickLinkData"> = <"name":"Eco Ch 14","id":"111139418","price":"","category":"premium content","variant":"research guide","position":"","brand":"jimmy_castillo7">; QLoad("occupychristmas.org.productClickLinkData"); return;;home window.area.assign("https://occupychristmas.org/111139418/eco-ch-14-flash-cards/");" id="1-111139418">
Eco Ch 14
37 terms
jimmy_castillo7
window.occupychristmas.org<"productClickLinkData"> = <"name":"Chapter 8 Quiz","id":"96038902","price":"","category":"premium content","variant":"study guide","position":"","brand":"abersolda">; QLoad("occupychristmas.org.productClickLinkData"); return;})}elsehome window.occupychristmas.org<"productClickLinkData"> = <"name":"Chapter 8 Quiz","id":"96038902","price":"","category":"premium content","variant":"study guide","position":"","brand":"abersolda">; QLoad("occupychristmas.org.productClickLinkData"); return;;home window.place.assign("https://occupychristmas.org/96038902/chapter-8-quiz-flash-cards/");" id="1-96038902">
Chapter 8 Quiz
42 terms
abersolda
home window.occupychristmas.org<"productClickLinkData"> = <"name":"Homeoccupational Unit-11 ( significant bucks bank)","id":"288467262","price":"","category":"premium content","variant":"research guide","position":"","brand":"Sarahi4157">; QLoad("occupychristmas.org.productClickLinkData"); return;})}elsehome window.occupychristmas.org<"productClickLinkData"> = <"name":"Homejob-related Unit-11 ( big bucks bank)","id":"288467262","price":"","category":"premium content","variant":"study guide","position":"","brand":"Sarahi4157">; QLoad("occupychristmas.org.productClickLinkData"); return;;window.location.assign("https://occupychristmas.org/288467262/homework-unit-11-big-bucks-bank-flash-cards/");" id="1-288467262">