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.Management Sciences
Category: Money, Interest Rates And Output
If the investment demand curve is vertical ?
A. both monetary and fiscal policy are ineffective
B. monetary policy is effective but fiscal policy is ineffective
C. monetary policy is ineffective but fiscal policy is effective
D. both monetary and fiscal policy are effective
The difference between a bank’s actual reserves and its required reserves is its?
A. required reserve ratio
B. profit margin
C. excess reserves
D. net worth
The main reason that people hold money to buy things is referred to as the ?
A. Profit motive
B. Precautionary motive
C. Transactions motive
D. speculation motive
According to the simple Keynesian view the aggregate supply curve is ?
A. downward sloping over all levels of output
B. upward sloping over all levels of output
C. horizontal until it reaches full capacity and then becomes vertical
D. vertical until it reaches full capacity and then becomes horizontal
The way in which government spending is supposed to reduce investment is by increasing ?
A. incomes
B. overseas investment
C. imports
D. interest rates
An example of an expansionary monetary policy is ?
A. a reduction in the taxes banks pay on their profits.
B. an increase in the required reserve ratio
C. an increase in the discount rate
D. the Central bank buying government securities in the open market
When the money supply increase ?
A. the economy moves up the LM curve
B. The LM curves shifts to the left
C. The economy moves down the LM curve
D. The LM curve shift to the right
The monetary base is ________ and _________?
A. bank deposits, building society deposits
B. Currency in circulation, banks cash reserves
C. retail sight deposits building society deposits
D. retail deposits, wholesale deposits
An item designated as money that is intrinsically worthless is ?
A. precious metals
B. commodity money
C. fiat money
D. barter items
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