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Savings accounts are also known as certificates of deposit time deposits demand

    Savings accounts are also known as

a.certificates of deposit

b.time deposits

c.demand deposits

d.money market deposit accounts

e.noninterest bearing M1 money

24.              The fastest growing money supply since 1970 has been

a.M1

b.M2

c.M3

d.M1 and M3 (approximately the same rate) and not M2 because M2 is part of M3

e.M1, M2, and M3 which, by definition, must grow at the same rate

25.              Unless otherwise specified, because it is what people and businesses use in their day-to-
                            day market transactions, when referring to money, economists are talking about

a.M1

b.M2

c.coins

d.credit cards

e.liquidity

 

26.              The equation of exchange is written as

a.V = PQM

b.MQ = PV

c.M = QVP

d.MQ = P

e.MV = PQ

27.              The number of times per year a dollar is used to transact an exchange is known as

a.liquidity of money

b.velocity of money

c.quantity theory of money

d.equation of exchange

e.rapidity index

28.              Keynesian economists believe that

a.since both V and Q are constants, the equation of exchange becomes the quantity
theory of money, which explains prices

b.the quantity theory of money is proof that money cannot influence how much we
produce, but does influence the prices of the goods we produce

c.even though velocity isn’t constant, it is predictable

d.if a change in M occurs, it may not only affect P, but also and at the same time affect Q

e.the velocity of money is unchanging, regardless of changes in M, P, or Q

29.              According to classical economists,

a.prices are rigid

b.both V and Q are variable

c.changes in M cause changes in V

d.the equation of exchange becomes a theory in which the quantity of money explains
liquidity

e.the velocity of money is constant

30.              Since classical economists believe that both V and Q are constants, the equation of
                            exchange becomes a theory in which

a.the quantity of money explains prices

b.the quantity of money explains velocity

c.the quantity of money explains real GDP

d.changes in M cause changes in V

e.prices are never flexible

Feb 11 2020 View more View Less

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