The changes in bank regulations expand the availability of credit cards so people need to hold less cash. Select one: a. money supply increase, money demand unchanged, interest rate decrease b. money supply decrease, money demand decrease, interest rate increase C. money supply decrease, money demand unchanged, interest rate increase d. money supply increase, money demand increase, interest rate decrease e. money supply unchanged, money demand decrease and interest rate decrease

The changes in bank regulations expand the availability of credit cards so people need to hold less cash. Select one: a. money supply increase, money demand unchanged, interest rate decrease b. money supply decrease, money demand decrease, interest rate increase C. money supply decrease, money demand unchanged, interest rate increase d. money supply increase, money demand increase, interest rate decrease e. money supply unchanged, money demand decrease and interest rate decrease

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter13: Money And The Financial System

Section: Chapter Questions

Problem 1.4P

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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 amount
Refer to Figure 14.5. Assume the interest rate equals 8% and the money supply decreases from to . If the interest rate remains at 8%: money demand will increase. money demand will decrease. there will be an excess demand for money. there will be an excess supply 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 increases
The quantity of money demanded depends upon the: a. Consumers' emergencies b. Outstanding bonds c. Investment in Government papers d. Interest rate
Equilibrium in the money market occurs when Select one: a. the transactions demand for money equals the precautionary demand for money. b. the quantity of money demanded is more than the quantity of money supplied in the economy. c. the quantity of money demanded equals the quantity of money supplied in the economy. d. the quantity of money demanded is less than the quantity of money supplied in the economy.
Question 1 a. Identify the following graphs to relate - Money in excess and Money in Shortage. b. Explain in detail as when would you say money is inexpensive and expensive. Money supply The amount of money demanded (held) depends on interest rates. E1 Money demand 92 91 QUANTITY OF MONEY (billions of dollars) Money supply The amount of money demanded (held) depends on interest rates. Money demand 92 QUANTITY OF MONEY (bilions of dollars) INTEREST RATE (percent per year) INTEREST RATE (percent per year)
Which of the following is money? A. A check is money because while it is in circulation the quantity of money increases by the amount of the check. B. Deposits are money, checks are not money, and credit cards are not money. C. A credit card is money because it allows you to take a loan at the instant you buy something. D. Currency is money and credit cards are money because they are means of payment, but deposits are not money.
Which statement is not correct? A. Money is a legal tender since the law requires a lender to accept money in the repayment of debts. B. Money as a store of value can be held and exchanged later for goods and services. C. In its role as a medium of exchange, money makes exchanges easier by reducing transactions costs. D. The demand for money represents the idea that there is a positive relationship between the interest rate and the quantity of money demanded. E. none of the above
Figure 1: Ms Interest Rate (%) 5% Md 150 Money ($ million) 9. Refer to Figure 1. At an interest rate of 4%, there is a: a) excess demand for money and the interest rate will decline. b) excess demand for money and the interest rate will rise. c) excess supply of money and the interest rate will decline. d) excess supply of money and the interest rate will rise.
a. tax increase b. economic growth c. expected inflation d. income increase e. currency appreciation f. technology breakthrough Which ones of the above economic factors will increase money supply? Which ones of the above economic factors will increase demand for money ?