Quiz 8 - Session 9
• Due No due date
• Points 20
• Questions 20
• Available 11 Nov at 8:00 - 11 Nov at 8:20 20 minutes
• Time limit 20 Minutes
This quiz was locked 11 Nov at 8:20.
Attempt history
Attempt Time Score
LATEST Attempt 1 19 minutes 20 out of 20
Score for this quiz: 20 out of 20
Submitted 11 Nov at 8:20
This attempt took 19 minutes.
Question 1
1 / 1 pts
According to the classical dichotomy, when the money supply doubles, which of the
following also doubles?
neither the nominal wage nor the price level
Correct!
the price level and nominal wages
the price level, but not the nominal wage
the nominal wage, but not the price level
Question 2
1 / 1 pts
A bank’s reserve ratio is 8 percent and the bank has $3,500 in reserve. Its deposits
amount to
$3,220
$3,500
Correct!
$43,750
$280
Question 3
1 / 1 pts
A bank’s reserve ratio is 8 percent, and the bank has $9,000 in deposits. Its reserves
amount to
Correct!
$720
$72
$8,280
$8,928
Question 4
1 / 1 pts
Based on the quantity equation, if Y = 3,000, P = 2, and V = 5, then M =
$300
$120
$7,500
Correct!
$1,200
Question 5
1 / 1 pts
On a given morning, Franco sold 50 pairs of shoes for a total of $100 at his shoe store
Both the $100 and the quantity of shoes are nominal variables.
Both the $100 and the quantity of shoes are real variables.
The $100 is a real variable. The quantity of shoes is a nominal variable.
Correct!
The $100 is a nominal variable. The quantity of shoes is a real variable.
Question 6
1 / 1 pts
Refer to Figure 2. What quantity is measured along the vertical axis?
Figure 2. On the graph, MS represents the money supply and MD represents money
demand. The usual quantities are measured along the axes.
the price level
the velocity of money
Correct!
the value of money
the quantity of money
Question 7
1 / 1 pts
As the price level decreases, the value of money
decreases, so people must hold less money to purchase goods and services.
decreases, so people must hold more money to purchase goods and services.
Correct!
increases, so people must hold less money to purchase goods and services.
increases, so people must hold more money to purchase goods and services.
Question 8
1 / 1 pts
Suppose that velocity rises while the money supply stays the same. It follows that
P x Y must fall.
P x Y must be unchanged.
the effects on P x Y are uncertain.
Correct!
P x Y must rise.
Question 9
1 / 1 pts
If when the money supply changes, real output and velocity do not change, then a 3
percent increase in the money supply
decreases the price level by less than 3 percent.
Correct!
increases the price level by 3 percent.
increases the price level by less than 3 percent.
decreases the price level by 3 percent.
Question 10
1 / 1 pts
If M = 12,000, P = 4, and Y = 24,000, then velocity =
8. Velocity will rise if money changes hands less frequently.
2. Velocity will rise if money changes hands less frequently.
Correct!
8. Velocity will rise if money changes hands more frequently.
2. Velocity will rise if money changes hands more frequently.
Question 11
1 / 1 pts
The existence of money
Correct!
makes trade easier.
allows for barter.
reduces specialization.
hinders production.
Question 12
1 / 1 pts
Refer to Figure 2. If the relevant money-supply curve is the one labeled MS2, then
Figure 2. On the graph, MS represents the money supply and MD represents money
demand. The usual quantities are measured along the axes.
when the money market is in equilibrium, one unit of goods and services sells for 33
cents.
All of the above are correct.
Correct!
when the money market is in equilibrium, one dollar purchases about one-third of a
basket of goods and services.
there is an excess demand for money if the value of money in terms of goods and
services is 0.5.
Question 13
1 / 1 pts
The primary cause of inflation is
reduced velocity of money.
Correct!
growth in the quantity of money.
variability in relative prices.
inter-bank lending.
Question 14
1 / 1 pts
If the reserve ratio is 8 percent, the money multiplier is
11.5
Correct!
12.5
10.5
Question 15
1 / 1 pts
A bank has a 10 percent reserve requirement, $9,000 in loans, and has loaned out all it
can given the reserve requirement.
It has $9,900 in deposits.
It has $900 in deposits.
It has $8,100 in deposits.
Correct!
It has $10,000 in deposits.
Question 16
1 / 1 pts
Open-market purchases by the Fed
make the price level and value of money fall.
Correct!
make the price level rise, and make the value of money fall.
make the price level and make the value of money rise.
make the price level fall, and make the value of money rise.
Question 17
1 / 1 pts
Refer to Figure 1. What quantity is measured along the horizontal axis?
Figure 1. On the graph, MS represents the money supply and MD represents money
demand. The usual quantities are measured along the axes.
the price level
Correct!
the quantity of money
the real interest rate
the value of money
Question 18
1 / 1 pts
Refer to Figure 1. If the relevant money-demand curve is the one labeled MD1, then the
equilibrium value of money is
Figure 1. On the graph, MS represents the money supply and MD represents money
demand. The usual quantities are measured along the axes.
Correct!
0.5 and the equilibrium price level is 2.
0.5 and the equilibrium price level cannot be determined from the graph.
2 and the equilibrium price level cannot be determined from the graph.
2 and the equilibrium price level is 0.5.
Question 19
1 / 1 pts
If the Federal Open Market Committee decides to decrease the money supply, it will
purchase government bonds.
Correct!
sell government bonds.
purchase corporate bonds.
reduce interest rates.
Question 20
1 / 1 pts
If the price level increased from 130 to 140, then what was the inflation rate?
Correct!
7.7 percent
7.1 percent
10.0 percent
None is correct.
Quiz score: 20 out of 20
