the economics of money, banking, and financial markets

136 #

© 2014 Pearson Canada Inc.#

9. 
   

   In the figure above, one factor not responsible for the decline in the demand for money is
   ____.
   A) a decline the price level
   B) a decline in income
   C) an increase in income
   D) a decline in the expected inflation rate
   Answer: C
   Diff: 2 Type: MC Page Ref: 101 - 102
   Skill: Applied
   Objective List: 5.5 Examine supply and demand for money using the liquidity preference
   framework

   
   


10. 
    

    In the figure above, the decrease in the interest rate from i 1 to i 2 can be explained by

    
    

____.
A) a decrease in money growth
B) a decline in the expected price level
C) an increase in income
D) an increase in the expected price level
Answer: B
Diff: 2 Type: MC Page Ref: 102 - 103
Skill: Applied
Objective List: 5.5 Examine supply and demand for money using the liquidity preference
framework