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Home / Questions / Keynesians believe that an increase in the money supply may lead to a decrease in

Keynesians believe that an increase in the money supply may lead to a decrease in

Keynesians believe that an increase in the money supply may lead to

a.a decrease in investment

b.an increase in the interest rate

c.an increase in the price level

d.a decrease in nominal GDP

e.an increase in real GDP

92.              Monetarists believe that an increase in the money supply will lead to

a.a decrease in investment

b.an increase in the interest rate

c.a decrease in the price level

d.an increase in nominal GDP

e.an increase in real GDP

93.              The speculative demand for money is associated with ___________ and, graphed with
                            interest rate on the vertical axis and money on the horizontal, is ___________.

a.classical economics; upward sloping

b.classical economics; downward sloping

c.monetarists; downward sloping

d.Keynesian economics; downward sloping

e.Keynesian economics; upward sloping

94.              The speculative motive for holding money reflects the behavior of people who hold money

a.instead of near money

b.to transact purchases they expect to make

c.as insurance against unexpected needs

d.to speculate in the stock market

e.to take advantage of anticipated or hoped for changes in interest rates

95.              The precautionary motive for holding money reflects the behavior of people who hold money

a.instead of near money

b.to transact purchases they expect to make

c.as insurance against unexpected needs

d.to speculate in the stock market

e.to take advantage of anticipated or hoped for changes in interest rates

96.              The transactions motive for holding money reflects the behavior of people who hold
                            money

a.instead of near money

b.to transact purchases they expect to make

c.as insurance against unexpected needs

d.to speculate in the stock market

e.to take advantage of changes in interest rates

97.              According to Keynesians, an increase in production when the money supply is fixed will

a.increase the transactions demand for money and that will cause the velocity of
money to increase

b.increase the transactions demand for money and that will cause the velocity of
money to decrease

c.decrease the transactions demand for money and that will cause the velocity of
money to increase

d.decrease the transactions demand for money and that will cause the velocity of
money to decrease

e.increase the speculative demand for money and that will cause the velocity of money
to increase

98.              Trace through the Keynesian cause-and-effect sequence. An increase in the money supply
                            will cause the interest rate to

a.fall, boosting investment and shifting the AD curve to the right, leading to an
increase in real GDP

b.fall, boosting investment and shifting the AD curve to the right, leading to a decrease
in real GDP

c.rise, cutting investment and shifting the AD curve to the right, leading to an increase
in real GDP

d.rise, boosting investment and shifting the AD curve to the left, leading to an increase
in real GDP

e.fall, cutting investment and shifting the AD curve to the left, leading to a decrease in
real GDP

99.              Trace through the Keynesian cause-and-effect sequence. A decrease in the money supply
                            will cause the interest rate to

a.fall, boosting investment and shifting the AD curve to the right, leading to an
increase in real GDP

b.fall, boosting investment and shifting the AD curve to the right, leading to a decrease
in real GDP

c.rise, cutting investment and shifting the AD curve to the right, leading to an increase
in real GDP

d.rise, boosting investment and shifting the AD curve to the right, leading to an
increase in real GDP

e.rise, cutting investment and shifting the AD curve to the left, leading to a decrease in
real GDP

100.              For barter exchange to take place,

a.there has to be a double coincidence of wants

b.the goods must be divisible

c.money must be assigned to each barter transaction to indicate the values exchanged

d.no less than four parties (at least two sellers, two buyers) to the exchange are needed

e.gold has to be one of the goods traded

Feb 11 2020 View more View Less

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