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ECO 4223 Exam 3 Questions And Correct Answers
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ECO 4223 Exam 3 Questions And Correct AnswersQuantity theory of money is a theory of how:
a. the money supply is determined
b. the real value of aggregate income is determined
c. interest rates are determined
d. the nominal value of aggregate income is determined -Answer the nominal value of
aggregate income is determined
The average number of times that a dollar is spent in buying the total amount of final
goods and services produced during a given time period is known as:
a. velocity
b. spending multiplier
c. gross national product
d. the money multiplier - Answer velocity
If the money supply is $500 and nominal income is $3,000 the velocity of money is:
a. 1/60
b. 60
c. 1/6
d. 6 - Answer 6
The equation of exchange says money times the number of times this money is spent in a
year must equal:
a. velocity
b. real income
c. nominal income
, d. real gross national product - Answer nominal income
Fisher's quantity theory of money says the demand for money is purely function of
___________, and _____________ not effect on the demand for money.
a. government spending, interest rates have
b. income, interest rates have
c. interest rates, income has
d. expectations, income has - Answer income, interest rates have
About Keynes the transactions component of money demand was determined by the
level of:
a. income
b. velocity
c. stock market values
d. interest rates - Answer income
Keynes believed that the transactions component of the demand for money was
determined by the level of people's _______, which he believed were proportional to
______.
a. incomes, age
b. transactions, age
c. incomes; wealth
d. transactions, income - Answer transactions, income
Of the three motives for holding money suggested by Keynes, which did he believe to be
the most sensitive to interest rates?
a. transactions motive
b. precautionary motive
c. speculative motive
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