money is correct? Money is neither income nor wealth. Money is not income but wealth. Money is both income and wealth. Money is sometimes income and other times wealth.
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2 Which of the following statements about money is correct?
- Money is neither income nor wealth.
- Money is not income but wealth.
- Money is both income and wealth.
- Money is sometimes income and other times wealth.
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- Q.1.5 Which one of the following statements is NOT true? (a) Money is the most liquid asset.(b) Money is a store of value.(c) Money is a unit of account.(d) Money is another term for income.Q.1.6 Which of the following will cause the demand curve for money to shift to theright?(a) An increase in real Gross Domestic Product (GDP).(b) A decrease in the repo rate.(c) An increase in the quantity of money available.(d) A decrease in the quantity of money available.Q.1.7 A budget deficit occurs when: (a) there is an increase in taxation.(b) government spends less than is generated by taxation.(c) government spending is very high.(d) Government spends more than is generated by taxation.2. What is normal goods? What is ordinary goods? Please indicate whether normal money must be ordinary money.Q.1.6 Which of the following will cause the demand curve for money to shift to theright?(a) An increase in real Gross Domestic Product (GDP).(b) A decrease in the repo rate.(c) An increase in the quantity of money available.(d) A decrease in the quantity of money available.Q.1.7 A budget deficit occurs when: (a) there is an increase in taxation.(b) government spends less than is generated by taxation.(c) government spending is very high.(d) Government spends more than is generated by taxation.
- Use the graph to explain why changes in the supply of money affect the quantity of money demanded.Which of the following are the four influences on the demand for money? (Check all that apply) A. Money Supply B. Inflation C. Income D. Interest Rates E. Credit AvailabilityWhat is money? Explain the definition in terms of the functions of money?
- When the interest rate falls , other things remaining the same, what change occurs in the market for money? The opportunity cost of holding money _______ and _______. A. rises ; the demand for money decreases B. rises ; the quantity of money demanded decreases C. falls ; the quantity of money demanded increases D. falls ; the demand for money increasesIf $P can purchase 1 basket of goods and services, then ---------------------- Value of money is $P. Value of money is 1/P baskets of goods and services. Value of money is P baskets of goods and services. Value of money is $1/P.According to your graph, the equilibrium value of money is , therefore the equilibrium price level is Now, suppose that the Fed reduces the money supply from the initial level of $3.5 billion to $2 billion. In order to reduce the money supply, the Fed can use open market operations to the public. Use the purple line (diamond symbol) to plot the new money supply (MS2 ). Immediately after the Fed changes the money supply from its initial equilibrium level, the quantity of money supplied is than the quantity of money demanded at the initial equilibrium. This contraction in the money supply will people's demand for goods and services. In the long run, since the economy's ability to produce goods and services has not changed, the prices of goods and services will and the value of money will
- What happens to the quantity of money when you take cash from an ATM? The quantity of money ______. A. doesn't change because the quantity of currency doesn't change B. decreases because both vault cash and your bank deposit decrease C. increases because currency increases D. doesn't change because your bank deposit decreases and currency increases by the same amountThe following table shows a money demand schedule, which is the quantity of money demanded at various price levels (P). Fill in the Value of Money column in the following table. Quantity of Money Demanded Price Level (P) Value of Money (1/P) (Billions of dollars) 1.00 1.5 1.33 2.0 2.00 3.5 4.00 7.0 Now consider the relationship between the price level and the quantity of money that people demand. The lower the price level, the money the typical transaction requires, and the money people will wish to hold in the form of currency or demand deposits. Assume that the Fed initially fixes the quantity of money supplied at $3.5 billion. Use the orange line (square symbol) to plot the initial money supply (MS1 ) set by the Fed. Then, referring to the previous table, use the blue connected points (circle symbol) to graph the money demand curve.Reflective Thinking 4) Veronica's income is $4,000 a month. She depusits $800 in a saving account, buys $300 wuorth of government securities, and leaves the rest for daily transactions. Veronica's transaction money demand is A) $5,100. B) $2,900. C) $3,200. D) $3,700. Answer: B Diff 2 Topic: The Demand for Money Skill: Analytic 307 5) Mary is paid on the 1st of every month and her rent is due on the 15th of every month. This is
