The time it takes for a one-dollar addition to bank reserves to work its way through the banking system and the financial portfolios of the public and have its full impact on the stock of money
A) is about one quarter of a year.
B) is between six and nine months.
C) is not yet known precisely because little empirical research has been done on the question.
D) probably cannot be predicted from an examination of historical data.
D
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The law of demand states that, other things equal, an increase in
a. price causes quantity demanded to increase. b. price causes quantity demanded to decrease. c. quantity demanded causes price to increase. d. quantity demanded causes price to decrease.
If aggregate demand increases and as a result equilibrium real GDP and employment increase but the price level remains unchanged, we can assume that the aggregate demand curve
A. is vertical. B. is horizontal. C. intersects a vertical segment of the aggregate supply curve. D. intersects a horizontal segment of the aggregate supply curve.
Which of the following statements is NOT true about the price system?
A) The price system allows resources to flow from low-valued uses to high-valued uses. B) Firms have total control over what consumers can buy. C) Individuals have freedom to purchase what they want. D) The price system allows for economic efficiency.
The property that makes money a good medium of exchange and a good store of value is the
A. unlimited supply of money. B. asset demand for money. C. transactions demand for money. D. liquidity property of money.