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.Management Sciences
Category: Money, Interest Rates And Output
Equilibrium in the Money market will change if there is ?
A. a change in the real money supply
B. a change in real income
C. a change in competition in the banking industry
D. any of the above
Bance Solida has, in the past, always operated with a reserve ratio of 25 percent. It has now been taken over by Gung-Ho Bank Which operates with a reserve ration of 12½ percent, Assuming that Banca Solida adopts the business practices of its new owner, What will be the effect on money supply in the country in which Banca Solida operates ?
A. Money supply will increase because Banca Solida will increase its loans
B. The effect on money supply cannot be determined from the information given
C. Money supply will decrease because the loans will have to be repaid
D. Money supply will be unchanged because the central bank has made no policy changes
Which of the following is included in broad money, but not included in narrow money ?
A. savings accounts
B. Travelers checks
C. Currency held outside banks
D. Automatic-transfer savings accounts
If the keep some money available in case I see a bargain this is an example of ?
A. asset demand for money
B. transactions demand for money
C. token demand for money
D. precautionary demand for money
Central banks prefer to fix the ____ and accept the resulting _____?
A. demand for money, interest rate
B. interest rate equilibrium money supply
C. demand for money equilibrium money supply
D. interest rate, demand for money
If the central bank buys financial securities in the open market to increase the monetary base, this is and example of ?
A. lender of less resort
B. financial intermediation
C. Open Market operations
D. Financial regulation
A bank has excess reserves to lend but is unable to find anyone to borrow the money This will _________ the size of the money multiplier?
A. reduce
B. have no effect on
C. increase
D. double
Each point on the LM curve represents the equilibrium point in the ?
A. money market for the given level of the money supply
B. money market for different combinations of interest rates and output
C. goods market for the given level of government spending
D. goods market for the given interest rate
Commodity money ?
A. has no intrinsic value
B. has intrinsic value
C. is used exclusively in the economies of western Europe and north America
D. is used as reserves to back fiat money
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