QUESTION 2 If the quantity of money demanded exceeds the quantity of money supplied, then O the quantity of nonmonetary assets demanded exceeds the quantity supplied. you can make no conclusions about the relative supply and demand of nonmonetary assets the quantity of nonmonetary assets demanded will still equal the quantity supplied, all else being equal. O the quantity of nonmonetary assets supplied exceeds the quantity demanded.

QUESTION 2 If the quantity of money demanded exceeds the quantity of money supplied, then O the quantity of nonmonetary assets demanded exceeds the quantity supplied. you can make no conclusions about the relative supply and demand of nonmonetary assets the quantity of nonmonetary assets demanded will still equal the quantity supplied, all else being equal. O the quantity of nonmonetary assets supplied exceeds the quantity demanded.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Interest Rate 4% 3 2. O2 percent 0 percent 4 percent a 3 percent MS b d Refer to Figure 15-1. At which interest rate is there an excess money supply? Money Demand Quantity of Money
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11
Indicate whether each of the following statements is True or False. In each case, give a brief explanation for your choice. If there is no explanation, then NO mark will be awarded for that answer.Q.1.1Technology is always treated as a factor of production in economic theory.(2)Q.1.2An important aspect of using money in an economy is that the process of exchange, can take place without worrying about there being a double coincidence of wants.(2)Q.1.3It is common knowledge that debit cards and cheques are perfect substitutes for money.(2)Q.1.4Free market economies are generally considered to be efficient and fair.(2)Q.1.5The term economic rent refers to the returns received by government when people use government land.
Interest rate 2% 4 6 8 C) 6 percent. D) 8 percent. 10 Transaction demand for money $220 220 220 220 220 Asset demand for money $300 280 260 240 220 1. Refer to the above table. The equilibrium interest rate is: B) 4 percent. Money supply $460 460 460 460 460 A) 2 percent.
What do economists mean by the "time value of money"? O A. The way that the value of a payment changes depending on when the payment is received. B. The fact that it takes time to make money. OC. The fact that money has value only if you have the time to enjoy it.
QUESTION 4 Peter withdraws $5000 from his savings account. Then he deposits $4000 in his checking account and puts the remaining $1000 in a safe box in his house. What is the overall effect of these actions on M1 and M2? O A. M1 rises by $5000, M2 falls by $5000 O B. M1 is unchanged, M2 is unchanged O C. M1 rises by $5000, M2 is unchanged O D. M1 is unchanged, M2 falls by $5000
Q3
Suppose the Bank of Canada lowers its target for the overnight interest rate and longer-term interest rates in the market fall as a result. When this occurs, the commercial banks respond to in the demand for loans by.. O a An increase; selling government securities to the Bank of Canada in exchange for cash, with which they can extend new loans. An increase; borrowing cash from the Bank of Canada with which they can extend new loans. O c. An increase; buying government securities from the Bank of Canada, against which they can extend new loans. O d. A decrease; buying government securities from the Bank of Canada in exchange for cash, and calling in existing loans. O e. A decrease; selling government securities to the Bank of Canada and calling in existing loans.
6.
Consider the following table: Interest rate % Asset demand for Money supply $460 460 220 460 220 460 220 460 The transactions demand for money in this money market would graph as a: 2 4 6 8 Transaction demand for money 10 vertical line $220 220 horizontal line money $300 280 260 240 220 Oline sloping downward and to the right single point line sloping upward and to the right
|D, 10 10 6. 6- D: 100 200 Amount of Money Demanded (SB) O 100 200 300 400 Amount of Money Demanded (SB) 100 200 300 400 500 600 Amount of Money Demanded (SB) Refer to the given market-for-money diagrams. The asset demand for money at equilibrium is $100. $$200 $300. O $400