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.Management Sciences
Category: Money, Interest Rates And Output
The interest rate ?
A. is determined in the goods market and influences the level of planned investment and thus the money market
B. is determined in the money market and influences the level of planned investment and thus the goods market
C. is determined in the goods market and has no influences on the money market
D. is determined in the money market and has no influence on the goods market
The opportunity cost of holding money is determined by ?
A. the discount rates
B. the level of aggregate output
C. the interest rates
D. the inflation rates
If the quantity of money demanded exceeds the quantity of money supplied then the interest rate will ?
A. change in a certain direction
B. remain constant
C. fall
D. rise
M4 is a __________ measure of money and includes deposits at both __________ and _________?
A. narrow, banks, building societies
B. wide, banks insurance companies
C. Narrow, banks insurance companies
D. Wide, banks building societies
The money supply is ?
A. State Bank of Pakistan Issue Department
B. Money + bank cards + credit cards
C. Cheques + money + bank cards + credit cards
D. Currency in circulation plus bank deposits
The demand for money represents the idea that there is ?
A. a positive relationship between the interest rate and the quantity of money demanded
B. a negative relationship between the price level and the quantity of money demanded
C. a negative relationship between the level of aggregate output and the quantity of money demanded
D. a negative relationship between the interest rate and the quantity of money demanded
When interest rate rise, other things equal, we can expect the quantity of real money holding to ?
A. fall
B. increase
C. not change
D. None of these
When economies speak of the demand for money which of the following are they asking ?
A. How much cash do you wish you could have?
B. How much wealth would you like?
C. How much income would you like to earn?
D. What proportion of your financial assets do you want to hold in non-interest-bearing forms
If the central bank increases the money supply at the same time as the government increasing spending, it is suggested that investment will ?
A. Suffer even more
B. not be reduced as much as it would have been
C. be replaced by foreign investment
D. be replaced by consumer spending
Which of the following statements about money is not true ?
A. A debit card is not really money because it is only a means of transferring money between accounts
B. All the wealth that people hold, in whatever form, should be considered as money
C. Wealth held in the current account you hold with your bank is almost as convenient for buying things as wealth held in your wallet so the wealth in current accounts should be included in measures of money
D. In a complex economy it is not easy to draw a clear dividing line between assets that should be considered as money and those that should not
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