A reduction in interest rates, causes an increases in the monetary base that results in an __ in the availability of consumer credit and a ________ in the cost of consumer credit?
Central banks prefer to fix the ____ and accept the resulting _____?
If the central bank buys financial securities in the open market to increase the monetary base, this is and example of ?
M4 is a measure of money and includes deposits at both _ and _________?
When interest rate rise, other things equal, we can expect the quantity of real money holding to ?
If the keep some money available in case I see a bargain this is an example of ?
If banks and the private sector decide to hold less cash the money multiplier will be ?
Banks create money by ?
Money has 3 main function they are and __________?
Each point on the LM curve represents the equilibrium point in the ?
The curve that illustrates the positive relationship between the equilibrium values of aggregate output and the interest rate in the money market is the ?
Each point on the IS curve represents the equilibrium point in the ?
The way in which government spending is supposed to reduce investment is by increasing ?
The idea the government spending causes a reduction in private investment is called ?
If The Central bank tries to keep the interest rate constant when the economy is operating on the steep part of the AS curve, _________ will occur?
If the investment demand curve is vertical ?
An example of an expansionary monetary policy is ?
The interest rate is determined in ?
The equilibrium level of aggregate output is determined in ?
The demand for money represents the idea that there is ?
The motive for holding money that encourages investors to hold bonds when interest rates are low, with the hope of selling them when interest rates are high, is the ?
Which of the following events will lead to a decrease in the equilibrium interest rate ?
When economies speak of the demand for money which of the following are they asking ?
Assume that commercial banks are holding excess reserves because business firms and consumers are not willing to borrow money A decrease in the discount rate is likely to ?
As the required reserve ratio is decreased the money multiplier ?
Which of the following activities is one of the responsibilities of the Bank of England to the banking system ?
Which of the following is included in broad money, but not included in narrow money ?
An item designated as money that is intrinsically worthless is ?
Government Securities with terms of more than one year are called ?
If there is a general shortage of liquidity in the money market then ?
The three main tools of monetary policy are ?
Suppose the State Bank purchases a Rs 1,000 government bond from you. If you deposit the entire Rs 1,000 in you bank what is the total potential change in the money supply as a result of the State Bank’s action if the your bank’s reserve ratio is 20 percent ?
Which of the following policy actions by a central bank is likely to increase the money supply ?
Suppose Imtiaz moves his Rs1,000 demand deposit from Bank A to Bank B. If both banks operate with a reserve ratio of 10 percent What is the potential change in money supply as a result of Gerard’s action ?
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 ?
Commodity money ?
Which of the following is not a function of money ?
A fall in investment demand can result from ?
One of the transmission mechanisms of monetary policy is through consumer demand when interest rates household wealth _ and consumption _________?
Equilibrium in the Money market will change if there is ?
The monetary base is _ and _________?
When real income increases other things equal we can expect the demand for real money holdings to ?
Three variables affect the demand for money they are and __________?
The money supply is ?
The primary function of bank is to ?
Keynesians and monetarists differ over how steep the IS and LM curves actually are Monetarists claim that the IS curve must be and the LM curve must be __________?
When the money supply increase ?
The curve that illustrates the negative relationship between the equilibrium values of aggregate output and the interest rate in the goods market is the ?
If planned investment becomes more sensitive to interest rate changes the crowding out effect will ?
If the central bank increases the money supply at the same time as the government increasing spending, it is suggested that investment will ?
According to the simple Keynesian view the aggregate supply curve is ?

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

Correct Answer: is determined in the money market and influences the level of planned investment and thus the goods market ✔

Last Updated: June 18, 2019