ECO321- UTAMPA Test 1 Ch. 1-5 questions with
verified answers
_____ are included in the money supply. Ans✓✓✓neither checks nor
debit cards
"Seigniorage" is a term that originated in _____ and refers to the
government's right to issue coins. Ans✓✓✓the Middle Ages
A _____ demand for real balances is consistent with _____ the income
velocity of money. Ans✓✓✓higher; a decrease in
A bank that chooses to lend some of the deposits that it receives from
customers: Ans✓✓✓is no longer a 100-percent-reserve banking system
A country is experiencing an inflation rate of exactly 100 percent per
month for 4 months. At the end of 4 months, the price level has
increased _____ times in relationship to the initial period. Ans✓✓✓16
A decrease in the expected rate of inflation MOST likely will:
Ans✓✓✓increase the demand for real balances because the nominal
interest rate will fall
A graph of the rate of inflation in the United States over the twentieth
century shows: Ans✓✓✓some periods of deflation mixed with mostly
positive rates of inflation before 1955 but only positive aftr 1955
, An increase in the number of bank failures will MOST likely cause the
reserve-deposit ratio to: Ans✓✓✓increase
As hyperinflation in an economy grows, it can cause the economy's
budget deficit to: Ans✓✓✓increase
Banks _____ create wealth. Ans✓✓✓create money but do not
credit cards are Ans✓✓✓a way of deferring payment
Endogenous variables are: Ans✓✓✓determined within the model
Hyperinflation occurred in Germany from 1922 to 1924 because
Ans✓✓✓at the end of World War I the Allies demanded large
reparations from Germany, causing it to have large fiscal deficits, which
the government eventually financed with seigniorage
If inflation increases, then it increases the _____ cost of holding money
because individuals need to make more trips to the bank to receive more
real balances. Ans✓✓✓shoeleather
If the monetary base doubles but the money supply stays the same, the
money multiplier will: Ans✓✓✓decrease by half
verified answers
_____ are included in the money supply. Ans✓✓✓neither checks nor
debit cards
"Seigniorage" is a term that originated in _____ and refers to the
government's right to issue coins. Ans✓✓✓the Middle Ages
A _____ demand for real balances is consistent with _____ the income
velocity of money. Ans✓✓✓higher; a decrease in
A bank that chooses to lend some of the deposits that it receives from
customers: Ans✓✓✓is no longer a 100-percent-reserve banking system
A country is experiencing an inflation rate of exactly 100 percent per
month for 4 months. At the end of 4 months, the price level has
increased _____ times in relationship to the initial period. Ans✓✓✓16
A decrease in the expected rate of inflation MOST likely will:
Ans✓✓✓increase the demand for real balances because the nominal
interest rate will fall
A graph of the rate of inflation in the United States over the twentieth
century shows: Ans✓✓✓some periods of deflation mixed with mostly
positive rates of inflation before 1955 but only positive aftr 1955
, An increase in the number of bank failures will MOST likely cause the
reserve-deposit ratio to: Ans✓✓✓increase
As hyperinflation in an economy grows, it can cause the economy's
budget deficit to: Ans✓✓✓increase
Banks _____ create wealth. Ans✓✓✓create money but do not
credit cards are Ans✓✓✓a way of deferring payment
Endogenous variables are: Ans✓✓✓determined within the model
Hyperinflation occurred in Germany from 1922 to 1924 because
Ans✓✓✓at the end of World War I the Allies demanded large
reparations from Germany, causing it to have large fiscal deficits, which
the government eventually financed with seigniorage
If inflation increases, then it increases the _____ cost of holding money
because individuals need to make more trips to the bank to receive more
real balances. Ans✓✓✓shoeleather
If the monetary base doubles but the money supply stays the same, the
money multiplier will: Ans✓✓✓decrease by half
