Econ(Money and banking ) below are the 50 question needed.

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Question 12 ptsThe best explanation of why the aggregate demand curve has a negative slope is that 

The best explanation of why the aggregate demand curve has a negative slope is that

	a higher price level results in less government spending on transfers, such as unemployment insurance and social security payments.
	a higher price level results in lower real balances and a higher real interest rate.

	at a higher price level business firms wish to produce more goods and services.
	at a higher price level households cut back on their spending on goods and services.

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Question 22 ptsTransactions velocity 

Transactions velocity

	is much smaller than the value of velocity obtained from dividing the money stock by GDP.
	was rejected by Irving Fisher as the correct definition of velocity in the quantity theory of money demand.

	is much smaller than the value of velocity obtained from dividing GDP by the money stock.
	is much larger than the value of velocity obtained from dividing GDP by the money stock.

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Question 32 ptsIn the new classical view, if the Chairman of the Fed announces a 10% increase in the money supply and then takes actions that cause the money supply to grow by more than 10%, the result will be

In the new classical view, if the Chairman of the Fed announces a 10% increase in the money supply and then takes actions that cause the money supply to grow by more than 10%, the result will be

	a 10% increase in the price level and no change in output.
	a greater than 10% increase in the price level and no change in output.

	a greater than 10% increase in the price level and an increase in output.
	a 10% increase in the price level and an increase in output.

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Question 42 ptsAccording to the new classical view, when the actual price level is greater than the expected price level 

According to the new classical view, when the actual price level is greater than the expected price level

	the coefficient a is equal to zero.
	aggregate output is below the full employment level.

	the aggregate supply curve will slope downward.
	aggregate output is above the full employment level.

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Question 52 ptsBusiness cycles 

Business cycles

	have existed since the Industrial Revolution, but have been analyzed by economists only since the nineteenth century.
	have existed since World War II, but have been analyzed by economists only since 1980.

	have existed since the nineteenth century, but have been analyzed by economists only since World War II.
	have existed since the Middle Ages, but have been analyzed by economists only since the Industrial Revolution.

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Question 62 ptsIn the new Keynesian view, the larger the proportion of firms in the economy with sticky prices, 

In the new Keynesian view, the larger the proportion of firms in the economy with sticky prices,

	the flatter the SRAS curve will be.
	the steeper the SRAS curve will be.

	the greater the increase in the price level for a given shift in the AD curve.
	the less effective is fiscal policy in increasing output.

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Question 72 ptsIn the new Keynesian expression for the price level, c represents 

In the new Keynesian expression for the price level, c represents

	the fraction of firms in the economy with sticky prices.
	the responsiveness of aggregate output to the difference between the actual price level and the expected price level.

	the marginal propensity to consume.
	the responsiveness of the price level to differences between actual aggregate output and full-employment aggregate output.

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Question 82 ptsThe book in which Milton Friedman and Anna Schwartz reported on their study of the relation between money and the business cycle is 

The book in which Milton Friedman and Anna Schwartz reported on their study of the relation between money and the business cycle is

	Money through the Ages.
	The General Theory of Employment, Interest, and Money.

	A Monetary History of the United States.
	Money and the Cycle.

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Question 92 ptsIn the new Keynesian approach, an increase in the nominal money supply 

In the new Keynesian approach, an increase in the nominal money supply

	raises real balances in the short run but not in the long run.
	does not raise real balances in either the short or long runs.

	raises real balances in both the short and long runs.
	raises real balances in the long run but not in the short run.

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Question 102 ptsIn the new Keynesian approach, an increase in the nominal money supply affects output by 

In the new Keynesian approach, an increase in the nominal money supply affects output by

	allowing the government to increase its expenditures.
	reducing the real interest rate, thereby stimulating consumption, investment, and net exports.

	directly increasing the wealth of consumers and, therefore, their spending.
	increasing the funds available for saving, thereby stimulating investment spending.

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Question 112 ptsDuring the years from 1964 to 1969, inflation increased in the United States 

During the years from 1964 to 1969, inflation increased in the United States

	when the AD curve shifted up and to the right and the SRAS curve shifted up and to the left.
	when the SRAS curve shifted up and to the left, even though the AD curve remained stable.

	despite the AD and SRAS curves remaining stable.
	when the AD curve shifted up and to the right, even though the SRAS curve remained stable.

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Question 122 ptsThe expression for velocity derived from Keynes's liquidity preference theory is 

The expression for velocity derived from Keynes's liquidity preference theory is

	V = L(Y, i)/Y.
	V = P/L(Y, i).

	V = L(Y, i)/P.
	V = Y/L(Y, i).

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Question 132 ptsWhich of the following expressions is correct? 

Which of the following expressions is correct?

	Yd = C + I + (G - T) + NX.
	Yd = C + I + G - NX.

	Yd = C + I + G + NX.
	Yd = C + I + (G - T) - NX.

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Question 142 ptsHolding everything else constant, the increased use of credit cards in recent years probably 

Holding everything else constant, the increased use of credit cards in recent years probably

	increased M1 velocity.
	caused nominal balances to rise more slowly than real balances.

	decreased M1 velocity.
	did not affect M1 velocity.

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Question 152 ptsThe simultaneous equilibrium of the money, nonmoney asset, and goods markets is known as 

The simultaneous equilibrium of the money, nonmoney asset, and goods markets is known as

	potential GDP.
	general equilibrium.

	nominal GDP.
	full equilibrium.

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Question 162 ptsHistorical evidence suggests that the predictions of the real business cycle view are 

Historical evidence suggests that the predictions of the real business cycle view are

	inaccurate in the long run.
	inaccurate in the short run.

	accurate in the short run.
	inaccurate in both the short and long run.

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Question 172 ptsMilton Friedman and Anna Schwartz believe that their evidence indicates that money growth causes output fluctuations because they discovered that 

Milton Friedman and Anna Schwartz believe that their evidence indicates that money growth causes output fluctuations because they discovered that

	the Fed always responds passively to changes in money demand.
	nominal interest rates move inversely with changes in the money supply.

	in many episodes, money changed as a result of a previous change in output.
	in many episodes, money changes preceded output changes and were independent of them.

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Question 182 ptsAccording to New Keynesians, why does an expected change in the money supply affect output in the short run? 

According to New Keynesians, why does an expected change in the money supply affect output in the short run?

	Many prices are set by long-term contracts and thus cannot respond quickly to increases in the money supply.
	Prices are flexible in the short run.

	People expect central banks to increase the money supply in response to increases in output.
	Firms have imperfect information.

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Question 192 ptsBen Bernanke and Alan Blinder found evidence that money is 

Ben Bernanke and Alan Blinder found evidence that money is

	neutral in the short run.
	not neutral in the short or long run.

	neutral in both the short and long run.
	not neutral in the short run.

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Question 202 ptsAccording to Friedman, the opportunity cost of holding money is determined by all of the following EXCEPT 

According to Friedman, the opportunity cost of holding money is determined by all of the following EXCEPT

	interest rate.
	permanent income.

	expected inflation.
	return on money.

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Question 212 ptsIn the new classical view, whether changes in the nominal money supply affect output in the short run depends on whether 

In the new classical view, whether changes in the nominal money supply affect output in the short run depends on whether

	the nominal interest rate is affected by changes in the money supply.
	the changes are expected or unexpected.

	the Fed reacts passively or actively to the onset of recessions.
	prices are flexible or inflexible.

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Question 222 ptsThe long-run Phillips curve illustrates 

The long-run Phillips curve illustrates

	a trade-off between expected inflation and unexpected inflation.
	a trade-off between unemployment and expected inflation.

	a trade-off between unemployment and unexpected inflation.
	no trade-off between unemployment and inflation.

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Question 232 ptsWhom did President Jimmy Carter appoint chair of the Board of Governors of the Fed in order to convince the public about his anti-inflation resolve? 

Whom did President Jimmy Carter appoint chair of the Board of Governors of the Fed in order to convince the public about his anti-inflation resolve?

	Milton Friedman
	Arthur Burns

	Paul Volcker
	Alan Greenspan

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Question 242 ptsWhen output exceeds its full-employment level, 

When output exceeds its full-employment level,

	the short-run aggregate supply function shifts down.
	wages fall.

	aggregate supply exceeds aggregate demand.
	the short-run aggregate supply function shifts up.

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Question 252 ptsEconomists believe that the most serious costs of inflation arise from 

Economists believe that the most serious costs of inflation arise from

	redistributions of wealth owing to unexpected inflation.
	menu costs.

	bracket creep.
	uncertainty about the rate of inflation.

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Question 262 ptsWhat does the coefficient a in the new classical expression for short-run aggregate supply represent? 

What does the coefficient a in the new classical expression for short-run aggregate supply represent?

	How much output responds when the actual price level differs from the expected price level
	The full employment level of output

	The price level in the previous period
	How much the price level responds when the actual level of output differs from the full employment level of output

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Question 272 ptsWhich of the following statements is correct? 

Which of the following statements is correct?

	New Keynesians believe that the aggregate supply curve is vertical in the short run but not in the long run.
	New Keynesians believe that the aggregate supply curve slopes upward in the long run.

	New classicals believe that the aggregate supply curve is a vertical line in both the short run and the long run.
	Both new classicals and new Keynesians believe that the aggregate supply curve is vertical in the long run.

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Question 282 ptsA decrease in the price level will lead to 

A decrease in the price level will lead to

	an increase in the real interest rate and an increase in net exports.
	a decrease in the real interest rate and an increase in net exports.

	an increase in the real interest rate and a decrease in net exports.
	a decrease in the real interest rate and a decrease in net exports.

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Question 292 ptsWhich of the following is a key assumption of Irving Fisher's quantity theory of money demand? 

Which of the following is a key assumption of Irving Fisher's quantity theory of money demand?

	Velocity is always constant.
	The price level is always constant.

	The money supply is always constant.
	Increases in the price level reduce the level of real money balances.

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Question 302 ptsWhich of the following is NOT included in aggregate demand? 

Which of the following is NOT included in aggregate demand?

	Net exports
	Demand for goods and services for consumption

	Investment in Treasury bonds
	Investment in business plant and equipment

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Question 312 ptsIn order to buy in 2006 a bundle of goods that cost $100 in 1965, you would need roughly 

In order to buy in 2006 a bundle of goods that cost $100 in 1965, you would need roughly

	$200.
	$106.

	$600.
	$1200.

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Question 322 ptsAccording to the real business cycle model, the economy's short-run aggregate supply curve is 

According to the real business cycle model, the economy's short-run aggregate supply curve is

	affected by monetary policy but not fiscal policy.
	horizontal.

	vertical.
	flatter than the long-run aggregate supply curve.

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Question 332 ptsInflation that is lower than expected redistributes wealth from 

Inflation that is lower than expected redistributes wealth from

	employers to employees under nominal wage contracts.
	the federal government to taxpayers.

	lenders to borrowers.
	borrowers to lenders.

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Question 342 ptsIf the nominal interest rate on saving is 12% and the expected inflation rate is 6%, what is the percentage reduction in real interest income resulting from a tax of 25%? 

If the nominal interest rate on saving is 12% and the expected inflation rate is 6%, what is the percentage reduction in real interest income resulting from a tax of 25%?

	50%
	25%

	60%
	100%

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Question 352 ptsMost economists believe that the aggregate supply curve is 

Most economists believe that the aggregate supply curve is

	upward-sloping in both the short run and in the long run.
	upward-sloping in the long run, but vertical in the short run.

	upward-sloping in the short run, but vertical in the long run.
	vertical in both the short run and in the long run.

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Question 362 ptsAccording to Keynes, the demand for real balances is best expressed by which of the following equations? 

According to Keynes, the demand for real balances is best expressed by which of the following equations?

	M/P = L(Y, i - im, πe - im)
	M/P = (1/V)Y

	M/P = L(Y, i)
	M/V = PY

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Question 372 ptsEconomists who back the use of rules by the Fed believe that they would result in 

Economists who back the use of rules by the Fed believe that they would result in

	the eventual adoption of price controls.
	lower growth rates of aggregate supply.

	a lower government budget deficit.
	increased credibility for Fed actions.

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Question 382 ptsKeynes referred to the effect of portfolio allocation decisions on the demand for money as the 

Keynes referred to the effect of portfolio allocation decisions on the demand for money as the

	speculative motive.
	precautionary motive.

	interest motive.
	transactions motive.

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Question 392 ptsThe typical firm will find that its payoff to reducing price increases after the announcement of a disinflation policy 

The typical firm will find that its payoff to reducing price increases after the announcement of a disinflation policy

	is independent of whether the policy is actually carried out.
	increases if it believes that the policy will actually be carried out.

	decreases if it believes that the policy will actually be carried out.
	depends on movements in the LRAS curve.

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Question 402 ptsWhich of the following statements is correct? 

Which of the following statements is correct?

	New classical economists believe money is neutral in the long run, but new Keynesian economists do not.
	New Keynesian economists believe money is neutral in the short run, but new classical economists do not.

	Both new Keynesian and new classical economists believe money is neutral in the long run.
	Both new Keynesian and new classical economists believe money is neutral in the short run.

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Question 412 ptsWhich of the following statements is true concerning the velocity of M1? 

Which of the following statements is true concerning the velocity of M1?

	It declined during the 1980s.
	It has increased during most of the period since the late 1940s.

	It has been roughly constant since the late 1940s.
	It declined during most of the period from the late 1940s to 1980, but rose during the 1980s.

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Question 422 ptsWhich of the following statements is correct? 

Which of the following statements is correct?

	Monetary expansions precede business cycle peaks, and monetary contractions precede business cycle troughs.
	There is no consistent relationship between monetary expansions and contractions, and the business cycle.

	Monetary expansions precede business cycle troughs, and monetary contractions precede business cycle peaks.
	Monetary expansions precede both business cycle troughs and business cycle peaks.

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Question 432 ptsWhich of the following statements is correct? 

Which of the following statements is correct?

	New classicals believe that the aggregate supply curve slopes upward in the short run.
	New Keynesians believe that the aggregate supply curve slopes upward in the long run.

	New classicals believe that the aggregate supply curve is vertical in the short run.
	New Keynesians believe that the aggregate supply curve is vertical in the short run.

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Question 442 ptsIf the coefficient a in the new classical expression for short-run aggregate supply were equal to zero, 

If the coefficient a in the new classical expression for short-run aggregate supply were equal to zero,

	the short-run aggregate supply curve would be a horizontal line.
	aggregate output would always be at its full-employment level.

	the short-run aggregate supply curve would slope down.
	aggregate output would only differ from its full-employment level if the actual price level did not equal the expected price level.

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Question 452 ptsAn increase in the money supply will result in a lower exchange rate because 

An increase in the money supply will result in a lower exchange rate because

	the real interest rate on domestic assets will rise relative to the rates on foreign assets.
	it will lead to faster domestic growth, resulting in an increase in exports to other countries.

	it will lead to lower inflation, thereby increasing the demand for domestic currency.
	the real interest rate on domestic assets will fall relative to the rates on foreign assets.

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Question 462 ptsMoney's convenience yield is 

Money's convenience yield is

	the interest rate on T-bills minus the interest rate on money.
	the amount of interest sacrificed in exchange for money's safety, liquidity, and low information costs.

	the nominal interest rate paid on money balances minus the expected inflation rate.
	the nominal interest rate paid on money balances plus the expected inflation rate.

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Question 472 ptsIn the new Keynesian view a decline in consumer confidence that leads to a shift left in the AD curve 

In the new Keynesian view a decline in consumer confidence that leads to a shift left in the AD curve

	will cause output to fall only if prices are fully flexible.
	will cause output to fall in the short run, but not in the long run.

	will cause output to fall in both the short run and the long run.
	will not cause output to fall in either the short run or the long run.

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Question 482 ptsMilton Friedman first proposed his explanation of money demand in 

Milton Friedman first proposed his explanation of money demand in

	the early 1900s.
	the 1800s.

	1995.
	1956.

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Question 492 ptsSustained growth in the money supply doesn't affect real output in the long run but does lead to inflation according to 

Sustained growth in the money supply doesn't affect real output in the long run but does lead to inflation according to

	new Keynesian economists, but not new classical economists.
	new classical economists, but not new Keynesian economists.

	neither new classical nor new Keynesian economists.
	both new classical and new Keynesian economists.

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Question 502 ptsIn the new Keynesian view, a disinflation policy 

In the new Keynesian view, a disinflation policy

	will rarely be credible.
	should use the cold turkey, rather than the gradual, approach.

	will almost always result in a recession.
	shifts the LRAS curve.