the economics of money, banking, and financial markets

(Sean Pound) #1
640 $
© 2014 Pearson Canada Inc.$



  1. 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) gross national product
    B) the spending multiplier
    C) the money multiplier
    D) velocity
    Answer: D
    Diff: 1 Type: MC Page Ref: 526
    Skill: Recall
    Objective List: 21.1 Describe how the demand for money is determined




  2. Because the quantity theory of money tells us how much money is held for a given amount of
    aggregate income, it is also a theory of ____.
    A) interest-rate determination
    B) the demand for money
    C) exchange-rate determination
    D) the demand for assets
    Answer: B
    Diff: 1 Type: MC Page Ref: 527
    Skill: Recall
    Objective List: 21.1 Describe how the demand for money is determined




  3. The velocity of money is ____.
    A) the average number of times that a dollar is spent in buying the total amount of final goods
    and services
    B) the ratio of the money stock to high-powered money
    C) the ratio of the money stock to interest rates
    D) the average number of times a dollar is spent in buying financial assets
    Answer: A
    Diff: 1 Type: MC Page Ref: 526
    Skill: Recall
    Objective List: 21.1 Describe how the demand for money is determined




  4. If the money supply is $600 and nominal income is $3,000, the velocity of money is
    ____.
    A) 1/50
    B) 1/5
    C) 5
    D) 50
    Answer: C
    Diff: 2 Type: MC Page Ref: 526
    Skill: Applied
    Objective List: 21.1 Describe how the demand for money is determined



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