Which of the following is correct? Select one: O a. Inflation encourages large holdings of money by the public O b. Inflation reduces people's real purchasing power O c. Inflation impedes financial markets in their role of allocating savings to alternative investments O d. Inflation encourages savings

Which of the following is correct? Select one: O a. Inflation encourages large holdings of money by the public O b. Inflation reduces people's real purchasing power O c. Inflation impedes financial markets in their role of allocating savings to alternative investments O d. Inflation encourages savings

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Assume, in the 3rd quarter of 2018 in the U.S., the velocity of money was 3.08 and the M2 money supply was $1,050 million. The average prices in the economy was $1.44. Based on this, what was the real GDP of the U.S. in the 3rd quarter of 2018. O a. $2,750 million O b.$1,250 millon Oc. $2,000 million O d. 52.250 million
Which of the following will result to a surplus in the financial account? O a. Amount paid to foreigners for goods and services is more than the amount received O b. Value of assets bought from foreigners is less than the value sold to foreigners O c. Value of assets sold to foreigners is less than the value bought from foreigners O d. Amount paid to foreigners for goods and services is less than the amount received In the Philippines, the Congress takes part in the implementation of fiscal policies. a. False; only the executive branch takes part in the implementation of fiscal policies O b. False; the legislative branch has nothing to do with fiscal policies O c. True O d. False; only the Bangko Sentral ng Pilipinas takes part in the implementation of fiscal policies
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Assume contractionary monetary policies have had the effect of lowering inflation rates from a 6% annual rate down to 2%. What do economists call this drop in inflation? O a. Deflation. O b. Inflation. O c. Devaluation. d. Depreciation. O e. Disinflation.
indicates that, in the long run, if the money supply increases at a slower rate than real GDP, there will be _ in the price level. Select one: O A. The equation of exchange; an increase O B. The quantity theory of money; an increase O . The equation of exchange; a decrease O D. The quantity theory of money; a decrease
Inflation the cost of holding money and the after-tax real interest rate. O A. increases; does not change O B. decreases; increases O C. decreases; decreases D. increases; increases O E. increases; decreases
Please answer the following in 5 minutes I’m trying to study.
Which one of the following statements is false? O A Liquidity preference model suggests that higher GDP growth leads to higher nominal interest rates. O B. The price-level effect of the growth of money supply leads to lower interest rates. OC. The liquidity effect of the growth of money supply leads to lower interest rates OD. Liquidity preference model suggests that when the bond markets is in excess supply, the money market is in excess demand
A period of inflation can be stopped by O A. increasing the growth rate of real output, to absorb consumer spending. O B. decreasing the money supply. O C. decreasing the interest rate, which causes aggregate demand to increase. O D. Answers A, B, and C all are correct. O E. None of the answers are correct.
The money stock grows by 15%, the real GDP grows by 2%, the velocity of circulation does not change. What will be the rate of inflation? 17.3% O 17% O 1.1739 O 12.74%
Reduction of interest rates in bank will reduce the consumption. a. False O b. True