the economics of money, banking, and financial markets

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29. 
    

    According to the quantity theory of money demand, ____.
    A) an increase in interest rates will cause the demand for money to fall
    B) a decrease in interest rates will cause the demand for money to increase
    C) interest rates have no effect on the demand for money
    D) an increase in money will cause the demand for money to fall
    Answer: C
    Diff: 2 Type: MC Page Ref: 527
    Skill: Recall
    Objective List: 21.1 Describe how the demand for money is determined

    
    


30. 
    

    Fisher's quantity theory of money suggests that the demand for money is purely a function of
    ____, and ____ no effect on the demand for money.
    A) income; interest rates have
    B) interest rates; income has
    C) government spending; interest rates have
    D) expectations; income has
    Answer: A
    Diff: 2 Type: MC Page Ref: 527
    Skill: Recall
    Objective List: 21.1 Describe how the demand for money is determined

    
    


31. 
    

    ____ quantity theory of money suggests that the demand for money is purely a function
    of income, and interest rates have no effect on the demand for money.
    A) Keynes's
    B) Fisher's
    C) Friedman's
    D) Tobin's
    Answer: B
    Diff: 2 Type: MC Page Ref: 527
    Skill: Recall
    Objective List: 21.1 Describe how the demand for money is determined

    
    


32. 
    

    Empirically testing the long-term quantity of money for Canada shows ____.
    A) a strong positive relationship between inflation and money growth rates
    B) a weak positive relationship between inflation and money growth rates
    C) a weak negative relationship between inflation and money growth rates
    D) a strong negative relationship between inflation and money growth rates
    Answer: A
    Diff: 2 Type: MC Page Ref: 528 - 529
    Skill: Recall
    Objective List: 21.1 Describe how the demand for money is determined