All of the following items, except one, are part of the equation of exchange. Which is the exception? Multiple Choice a)Real output. b) The interest rate. c)The money supply. d)The velocity of money. e)The price level
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- Attempt the following multiple choice questions: 1. The velocity of money represents: (a) Whether individuals are increasing or decreasing the quantity of money spent in an economy (b) The quantity of money available in an economy (c) The level of prices determined by the equation of exchange (d) How often money is used in a specific period of time (e) Whether currency is accepted as a medium of exchange in an economy 2. According to the quantity theory of money, (a) Increases in the money supply will lead to inflation, ceteris paribus (b) The level of inflation is independent of the money supply (c) The money supply times the velocity equals the real GDP (d) When real GDP rises, the money supply must fall by the same proportion (e) The velocity of money is assumed to fluctuate widely over time 3. Monetarists differ from Classical economists in their view of money in that monetarists believe: (a) The velocity of money is relatively constant over time (b) Prices are not influenced by…True or false. I need help with both. Commodity money is money that has no intrinsic value. True or false (I got false on this one because of the commodity having value within itself). Milk can go bad, which makes it worthless. Therefore, milk would not be a good form of money because it does not serve very well as a storage of value. True or false (I got true on this one as milk is a perishable item and the quality itself does not last long compared to non-perishables).Which of the following properties of a commodity are related to is function as a medium of exchange a) Durability b) Unit of Account c) Homogeneity. d) None of the options is correct. If an economy is at full employment it must be the case that a) an increase of the money supply generates a deflationary process in the long run, while a reduction of the money supply brings along an increase in GDP in the short run. b) an increase of the money supply generates an inflationary process in the long run, while a reduction of the money supply brings along an increase in GDP in the short run. c) an increase of the money supply generates a deflationary process in the long run, while a reduction of the money supply brings along a drop in the GDP of the economy in the short run. d) an increase of the money supply generates an inflationary process in the long run, while a reduction of the money supply brings along a drop in the GDP of the economy in the short run.
- One reason that the quantity of money demanded will increase as the value of a currency decreases is called: a) Import effect b) export effect c) Trade effect d) None of the aboveSelect all statements from below that accurately describe shifts in the supply or demand of the Australian dollar (AUD): Group of answer choices American consumers increase their demand for stainless steel appliances, resulting in greater Australian exports of iron ore. This causes the demand curve for the AUD to shift to the right. Australian restauranteurs increase their imports of spices from India, shifting the supply curve of the AUD to the right. Temperatures in Japan rise, leading to a decrease in Australian wool exports to that nation. This causes the supply curve of the AUD to shift left. Senegal opens its markets to import Australian goat/sheep meat. This causes the demand curve of the AUD to shift left. Mongolian manufacturers switch their primary supplier of aluminum oxide from China to Russia, causing the supply curve of the AUD to decrease.The velocity of money represents: (a) Whether individuals are increasing or decreasing the quantity of money spent in an economy (b) The quantity of money available in an economy (c) The level of prices determined by the equation of exchange (d) How often money is used in a specific period of time (e) Whether currency is accepted as a medium of exchange in an economy
- Refer to the following list, and explain who will be buying Canadian dollars and who will be selling. a) a Canadian businesswoman visiting Japan The Canadian businesswoman will be selling vCanadian dollars to buy Japanese yen b) a Russian tourist visiting Cape Breton The Russian tourist will be (Click to select) v dollars to spend in Cape Breton. c) an American corporation building a new plant in Saskatoon The American corporation will be (Click to select) v Canadian dollars in order to purchase the building in Saskatoon. d) a Canadian bank expanding its operations in the United States The Canadian bank will be (Click to select) v Canadian dollars to buy American dollars to expand its operations in the U.S. (Click to select) selling buyinga) Which of the following is not true? In a monetary economy, economic goods and services have both a relative price and nominal price In a barter economy, nominal price inflation is possible Aggregate supply and Aggregate demand curves determine the price level If the nominal interest rate is below the real rate of interest, deflation of nominal prices is expected in the future It is logically possible for the nominal price of every economic good and service to increase b) Which of the following not true with respect to money? Money evolved from barter exchange Money solves the “double co-incidence” of wants problem Many economic goods have served as money including livestock, tobacco, and furs or skins Paper money originated in Europe in 1641 because of legal tender laws The first coins were minted in the Kingdom of Lydia 650 BCThe Bank of Canada wishes to reduce the money supply, implementing a tight monetary policy. Which of the following is NOT consistent with this goal? (A) Reducing the reserve requirement for banks. (B) Selling government bonds. (C) Increasing the target for the overnight rate. (D) Printing less currency
- Which of the following will cause the demand curve for money to shift to the right? (a) An increase in real Gross Domestic Product (GDP).(b) A decrease in the repo rate.(c) An increase in the quantity of money available.(d) A decrease in the quantity of money available.Which of the following is true about the equation of exchange? A. The equation of exchange can be presented as: M + V = P + Q. B. Velocity represents the average number of times that a dollar is used in purchasing final goods or services in a one-year period. C. If M decreases, and V increases, then P must rise and/or Q must rise. D. All of the above are true about the equation of exchange.Suppose the central bank in the nation of Zook attempts to pay off its national debt by printing large amounts of currency. The large increase in the money supply causes the price level to rise by 1,300 percent. What do you expect will happen to the value of Zook's currency? Instructions: Round your answer to the nearest whole number. The value of Zook's currency will (Click to select) by percent.