The transactions demand for money is least likely to be a function of the:
A. Price level
B. Interest rate
C. Level of national income
D. Frequency of wage and salary payments
B. Interest rate
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An increase in the interest rate will ________.
A. cause a move down along the money supply curve B. cause a move up along the money supply curve C. shift the money supply curve to the left D. shift the money supply curve to the right
Contractionary monetary policy refers to an insurance system that makes sure depositors in a bank do not lose their money, even if the bank goes bankrupt
a. True b. False Indicate whether the statement is true or false
Suppose that you purchase a $5,000 bond that pays 7 percent interest annually and matures in five years. If you expect that the inflation rate during the next five years will be 2 percent annually, what real rate of return do you expect to earn?
a. 2 percent b. 5 percent c. 7 percent d. 9 percent
Assume that GDP = $10,000 and the MPC = 0.75. If policy makers want to increase GDP by 30 percent, and they want to change taxes and government spending by equal amounts, how much would government spending and taxes each need to increase?
A) $300 B) $750 C) $1,000 D) $3,000