Study Game - Topic 4.5

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The Money Market

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HS4

Economics

money market

Recommended age: 17 years old

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Created by

Zachary Foust

United States

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Study Game - Topic 4.5Online version The Money Market by Zachary Foust 1 Which of the following changes will necessarily occur as a result of an increase in the nominal interest rate? a The money demand curve will shift to the left. b The money demand curve will shift to the right. c The quantity of money supplied will decrease. d The quantity of money demanded will decrease. 2 An increase in the equilibrium nominal interest rate could be caused by which of the following changes? a An increase in the monetary base b An increase in real income c A decrease in the amount of cash the public wants to hold d A decrease in the price level 3 Which of the following describes the relationship between the nominal interest rate and the quantity of money people want to hold as depicted by the money demand curve? a Positive, and the money demand curve is upward sloping. b Positive, and the money demand curve is downward sloping. c Inverse, and the money demand curve is upward sloping. d Inverse, and the money demand curve is downward sloping. 4 Assume that the central bank of a country purchases bonds. Which of the following will mostly likely occur as a result of this change? a Money supply will increase b Money supply will decrease c Money demand will increase d Money demand will decrease 5 What are open-market operations? a The buying and selling of bonds by country's central bank b The buying and selling of bonds by the Treasury Department c The interest rate that the central bank charges commercial banks d The buying and selling of bonds by foreign investors 6 Which of the following best describes the discount rate? a The interest rate that banks charge their best customers b The interest rate that banks charge each other c The interest rate that the central bank charges commercial banks d An interest rate that is lower than the average interest rate 7 How will an increase in the reserve requirement affect excess reserves and the money supply? a Excess reserves will increase, and the money supply will decrease. b Excess reserves will increase, and the money supply will increase. c Excess reserves will decrease, and the money supply will decrease. d Excess reserves will decrease, and the money supply will increase. 8 In an economy with limited reserves, how will an open-market purchase of bonds by a country's central bank affect the nominal interest rate? a The nominal interest rate will increase b The nominal interest rate will decrease c The nominal interest rate will remain unchanged d The nominal interest rate will increase then decrease 9 What will be the effect of an increase in the use of credit cards? a The money supply will increase, and the nominal interest rate will decrease. b Money demand will increase, and the nominal interest rate will increase. c Money demand will decrease, and the nominal interest rate will increase. d Money demand will decrease, and the nominal interest rate will decrease. 10 Assume that the Federal Reserve, the central bank of the United States, increases the discount rate. How will this affect money supply and money demand? a Money supply will remain unchanged, and money demand will increase. b Money supply will increase, and money demand will remain unchanged. c Money supply will decrease, and money demand will remain unchanged. d Money supply will remain unchanged, and money demand will remain unchanged. 11 What is the money market? a A graph that illustrates the equilibrium nominal interest rate b A graph that illustrates the equilibrium price level c A graph that illustrates the equilibrium real interest rate d A graph that illustrates the equilibrium exchange rate 12 What is money demand? a It shows the negative relationship between the nominal interest rate and the quantity of money demanded. b It shows the positive relationship between the nominal interest rate and the quantity of money demanded. c It shows the relationship between the nominal interest rate and the quantity of money supplied d It shows the negative relationship between the nominal interest rate and the quantity of money supplied. 13 What is money supply? a It shows the negative relationship between the nominal interest rate and the quantity of money demanded. b It shows the positive relationship between the nominal interest rate and the quantity of money demanded. c It shows the relationship between the nominal interest rate and the quantity of money supplied. d It shows the negative relationship between the nominal interest rate and the quantity of money supplied. 14 Which of the following changes would result in an increase in the nominal interest rate? a An increase in the use of alternative methods of payment b A decrease in the price level c An open-market purchase of bonds d An increase in the discount rate 15 Why is the money demand curve downward-sloping? a As the nominal interest rate increases, the opportunity cost of holding money increases. b As the nominal interest rate increases, the opportunity cost of holding money decreases. c The level of money demand is set by the central bank. d The level of money demand is set by Congress and the President.

Study Game - Topic 4.5Online version

The Money Market

by Zachary Foust

Which of the following changes will necessarily occur as a result of an increase in the nominal interest rate?

The money demand curve will shift to the left.

The money demand curve will shift to the right.

The quantity of money supplied will decrease.

The quantity of money demanded will decrease.

An increase in the equilibrium nominal interest rate could be caused by which of the following changes?

An increase in the monetary base

An increase in real income

A decrease in the amount of cash the public wants to hold

A decrease in the price level

Which of the following describes the relationship between the nominal interest rate and the quantity of money people want to hold as depicted by the money demand curve?

Positive, and the money demand curve is upward sloping.

Positive, and the money demand curve is downward sloping.

Inverse, and the money demand curve is upward sloping.

Inverse, and the money demand curve is downward sloping.

Assume that the central bank of a country purchases bonds. Which of the following will mostly likely occur as a result of this change?

Money supply will increase

Money supply will decrease

Money demand will increase

Money demand will decrease

What are open-market operations?

The buying and selling of bonds by country's central bank

The buying and selling of bonds by the Treasury Department

The interest rate that the central bank charges commercial banks

The buying and selling of bonds by foreign investors

Which of the following best describes the discount rate?

The interest rate that banks charge their best customers

The interest rate that banks charge each other

The interest rate that the central bank charges commercial banks

An interest rate that is lower than the average interest rate

How will an increase in the reserve requirement affect excess reserves and the money supply?

Excess reserves will increase, and the money supply will decrease.

Excess reserves will increase, and the money supply will increase.

Excess reserves will decrease, and the money supply will decrease.

Excess reserves will decrease, and the money supply will increase.

In an economy with limited reserves, how will an open-market purchase of bonds by a country's central bank affect the nominal interest rate?

The nominal interest rate will increase

The nominal interest rate will decrease

The nominal interest rate will remain unchanged

The nominal interest rate will increase then decrease

What will be the effect of an increase in the use of credit cards?

The money supply will increase, and the nominal interest rate will decrease.

Money demand will increase, and the nominal interest rate will increase.

Money demand will decrease, and the nominal interest rate will increase.

Money demand will decrease, and the nominal interest rate will decrease.

Assume that the Federal Reserve, the central bank of the United States, increases the discount rate. How will this affect money supply and money demand?

Money supply will remain unchanged, and money demand will increase.

Money supply will increase, and money demand will remain unchanged.

Money supply will decrease, and money demand will remain unchanged.

Money supply will remain unchanged, and money demand will remain unchanged.

What is the money market?

A graph that illustrates the equilibrium nominal interest rate

A graph that illustrates the equilibrium price level

A graph that illustrates the equilibrium real interest rate

A graph that illustrates the equilibrium exchange rate

What is money demand?

It shows the negative relationship between the nominal interest rate and the quantity of money demanded.

It shows the positive relationship between the nominal interest rate and the quantity of money demanded.

It shows the relationship between the nominal interest rate and the quantity of money supplied

It shows the negative relationship between the nominal interest rate and the quantity of money supplied.

What is money supply?

It shows the negative relationship between the nominal interest rate and the quantity of money demanded.

It shows the positive relationship between the nominal interest rate and the quantity of money demanded.

It shows the relationship between the nominal interest rate and the quantity of money supplied.

It shows the negative relationship between the nominal interest rate and the quantity of money supplied.

Which of the following changes would result in an increase in the nominal interest rate?

An increase in the use of alternative methods of payment

A decrease in the price level

An open-market purchase of bonds

An increase in the discount rate

Why is the money demand curve downward-sloping?

As the nominal interest rate increases, the opportunity cost of holding money increases.

As the nominal interest rate increases, the opportunity cost of holding money decreases.

The level of money demand is set by the central bank.

The level of money demand is set by Congress and the President.

Study Game - Topic 4.5

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Study Game - Topic 4.5

Quiz

Download the paper version to play

Created by

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Study Game - Topic 4.5Online version

by Zachary Foust

Which of the following changes will necessarily occur as a result of an increase in the nominal interest rate?

An increase in the equilibrium nominal interest rate could be caused by which of the following changes?

Which of the following describes the relationship between the nominal interest rate and the quantity of money people want to hold as depicted by the money demand curve?

Assume that the central bank of a country purchases bonds. Which of the following will mostly likely occur as a result of this change?

What are open-market operations?

Which of the following best describes the discount rate?

How will an increase in the reserve requirement affect excess reserves and the money supply?

In an economy with limited reserves, how will an open-market purchase of bonds by a country's central bank affect the nominal interest rate?

What will be the effect of an increase in the use of credit cards?

Assume that the Federal Reserve, the central bank of the United States, increases the discount rate. How will this affect money supply and money demand?

What is the money market?

What is money demand?

What is money supply?

Which of the following changes would result in an increase in the nominal interest rate?

Why is the money demand curve downward-sloping?