1) Rising prices erode the value of money as a ________ and a ________.
A) medium of exchange; store of value
B) unit of barter; unit of account
C) store of value; unit of barter
D) store of value; unit of liquidity
A) medium of exchange; store of value
2) The Fed's two main monetary po...
Best Grades | Must Pass | Latest Update | Correct Answers | 2024/ 2025
ECO 213 - exam 3 Questions and Correct
Answers | Latest Update
1) Rising prices erode the value of money as a ________ and a ________.
A) medium of exchange; store of value
B) unit of barter; unit of account
C) store of value; unit of barter
D) store of value; unit of liquidity
A) medium of exchange; store of value
2) The Fed's two main monetary policy targets are
A) the money supply and short term interest rates.
B) the inflation rate and real GDP
C) short term interest rates and real GDP.
D) the money supply and the inflation rate.
A) the money supply and short term interest rates.
3) The money demand curve has a negative slope because
A) lower interest rates cause households and firms to switch from money to financial assets.
B) lower interest rates cause households and firms to switch from financial assets to money.
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C) lower interest rates cause households and firms to switch from money to bonds.
D) lower interest rates cause households and firms to switch from money to stocks.
B) lower interest rates cause households and firms to switch from financial
assets to money.
4) Which of the following is NOT a goal of monetary policy?
A) price stability
B) low unemployment
C) maximizing the value of the dollar relative to other currencies
D) economic growth
C) maximizing the value of the dollar relative to other currencies
5) Money demand will increase if the price level ________ or if real GDP ________.
A) decreases; decreases
B) decreases; increases
C) increases; decreases
D) increases; increases
D) increases; increases
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, Best Grades | Must Pass | Latest Update | Correct Answers | 2024/ 2025
6) An increase in real GDP
A) increases the buying and selling of goods and increases the demand for money as a
medium of exchange.
B) decreases the buying and selling of goods and decreases the demand for money as a
medium of exchange.
C) decreases the buying and selling of goods and increases the demand for money as a
medium of exchange.
D) increases the buying and selling of goods and decreases the demand for money as a
medium of exchange.
A) increases the buying and selling of goods and increases the demand
for money as a medium of exchange.
7) When the market price of a financial asset ________ its interest rate will ________.
A) falls; rise
B) rises; rise
C) falls; fall
D) rises; does not change
A) falls; rise
8) Suppose the Fed raises the money supply. Which of the following is true?
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