the economics of money, banking, and financial markets

137 #

© 2014 Pearson Canada Inc.#

11. 
    

    In the figure above, the factor responsible for the decline in the interest rate is ____.
    A) a decline the price level
    B) a decline in income
    C) an increase in the money supply
    D) a decline in the expected inflation rate
    Answer: C
    Diff: 1 Type: MC Page Ref: 102 - 104
    Skill: Applied
    Objective List: 5.5 Examine supply and demand for money using the liquidity preference
    framework

    
    


12. 
    

    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) an increase in money growth
    C) a decline in the expected price level
    D) an increase in income
    Answer: B
    Diff: 2 Type: MC Page Ref: 102 - 104
    Skill: Applied
    Objective List: 5.5 Examine supply and demand for money using the liquidity preference
    framework