Test 1 Review 2021

Give suitable examples for the three broad motives on the basis of which money is required by people?

What does the term exogenous money supply mean? a. The money supply is determined by external factors b. The money supply is controlled by households c. The money supply is determined by the central bank d. The money supply is determined by market forces.

Based on the impact of a drop in the discount rate on the supply of money in the market. select an economic problem where that impact would work and explain what happens.

Which of the following is an example of representative money?   Group of answer choices   Gold   Cowry shells   Salt   Tea

This is not a writing assignment, this is a multiple-choice question Which of the below statements about the U.S. Federal Reserve is INCORRECT? Please mark the incorrect statement. Group of answer choices   The U.S. Federal Reserve, in its current form, was formed in 1913, immediately before World War I.   As in all other countries the United States has one Central Bank which is a branch of the Federal Government. The U.S. Central Bank, called the Federal Reserve, is a government agency funded by tax payer dollars.   To counter the Great Recession of 2008-2009 and to stop the recession from getting worse, the Federal Reserve lowered short term interest rates to close to zero per cent in its attempt to increase the money supply.   The U.S. Federal Reserve controls money supply and sets the U.S. monetary policy.

A student who cashes a check at the student union in order to go shopping illustrates an example of the Transaction demand for money. Speculative demand for money. Precautionary demand for money. Income effect. Substitution effect.

Recently, Bangladesh bank increased the money supply which caused the interest rate to fall.Which theories can be used to explain and analyze the given situation? What does these theoriespredict? Discuss in detail using diagrams.

Which of the following individuals is NOT associated with the school of Modern Monetary Theory? Group of answer choices Bernie Sanders, U.S. Senator from Vermont, Presidential Candidate Bill Mitchell, Australian professor of economics and theorist Randall Wray. The Levy Institute at Bard College Lawrence Summers, former Treasury Secretary and President of Harvard US Representative Alexandria Ocasio-Cortez

Consider an economy in which there is one consumer born at the start of each time period. Each consumer lives for two periods and receives an endowment of 1 unit of the consumption good when young. At the start of the economy there is a consumer who is already old. This consumer owns one unit of money but has no endowment of the consumption good. Money has no intrinsic value. a. Can money be valuable in a finite economy (one that has a known end point)? b. Can money be valuable in an infinite economy? c. Can money allow exigency to be attained?      

Kevin has saved $30 per week to buy a new Blu-Ray player. He compares two different models: a Panaview that is priced at $130 and a Zony model that is priced at $140. Kevin decides to purchase the Zony Blu-Ray player for $140. Identify what role money plays in each of the following parts of the story. Hint: Select each role only once. Role of Money Medium of Exchange Unit of Account Store of Value Kevin can easily determine that the Panaview model has a lower price than the Zony model.         Kevin saved $30 per week.         Kevin pays $140 for the Blu-Ray player.

Answer this question in no more than 5 sentences. Why is it necessary for money to possess the necessary attributes that qualify it as “good money”?

The money demand curve is a. Downward sloping because the opportunity cost of holding money rises as the interest rate rises b. Downward sloping because the opportunity cost of holding money rises as the interest rate falls c. Downward sloping because the opportunity cost of holding money is inversely related to the interest rate d. Upward sloping because the opportunity cost of holding money rises with the interest rate

True or False questions. Provide economic intuition or draw relevant diagrams to justify your answers.   1. Financial innovations in the form of a cryptocurrency reduces the money multiplier and money supply.

How is the value of money originally determined?  a. By a discount cash flow analysis of the commodity in question b. By whichever asset is decreed by a government as the money of the land c. By using game theory, where market participants appraise how other participants value it d. By its use in the production of other goods, such as when it is used in the production of high-value goods

When the demand for money is greater than the supply of money:     A) people offering to sell nonmonetary financial assets must increase the interest rate these assets pay in order to sell them.   B) more people will hold money.   C) the opportunity cost of holding money will fall.   D) interest rates will fall.

Complete the sentences with the correct function of money. Norah walks into her favorite department store, Bullseye, to pick out a new dress. She checks out the price tag and is excited to see that the dress is on sale and is now relatively cheaper than another dress she was considering. Here, money is serving as aShe is especially excited because she has been saving money each week in her piggy bank at home so that she can afford a trip to Florida next summer. Here, money is serving as aShe quickly walks to the checkout line where she pays the cashier for her new dress. Here, money is serving as a       Answer bank in images

Explain Homogeneity postulate as a concept of monetary economics.

Explain the following lines taken from the selection, Imagination and Reality by J. Winterson:  .” Money culture recognizes no currency but its own. Whatever is not money, whatever is not making money, is useless to it. The entire efforts of our government as directed through our society are efforts towards making more and more money. This favors the survival of the dullest. This favors those who prefer to live in a notional reality where goods are worth more than time and where things are more important than ideas.”

8, Q4) Hey, need help with the following multi-part macroeconomics problem. Thank you in advance! In this problem, consider a simple mutual fund. Households and businesses invest in the fund by buying shares; the fund uses this money, in turn, to invest in a range of assets, including equities and bonds. If an investor wishes to divest from the fund, she can “redeem” her shares. Redeeming involves selling the shares back to the mutual fund for a price called the “net asset value” (NAV). The NAV is equal to the difference between assets and liabilities, divided by the total number of investors in the fund (similar to the shareholders’ equity discussed in this chapter). The NAV is updated at the end of each day. Thus every investor who redeems on a given day will get the same price. What does this fund’s balance sheet look like? Suppose several large investors in the mutual fund start getting nervous about market conditions and decide to redeem, all on the same day. How will these…

Multiple Choice. Select the most suitable answer. The speculative demand for money suggests that: (a)    Individuals hold onto money for the purpose of engaging in transactions (b)   As the rate of interest rate increases, the demand for money will rise (c)    When the economy becomes more uncertain, people are more likely to hold unto money (d)   The velocity of money is constant (e)    As the rate of interest falls, the demand for money will rise.

discuss the scope and importance of monetary economics to the feild of economics

What are the critical assumptions that lead to the paradox of thrift (POT)? Use the I=S relationship to explain the POT “intuitively.”

Economi 15. The federal deposit insurance corporation (FDIC) insures individual bank accounts up to $250,000 per account. Which of the following statements regarding FDIC insurance is true? FDIC insurance a. does not eliminate the need for reserve requirements because bank runs can't be eliminated in a fractional reserve banking system b. has prevented bank runs because the FDIC pays depositors interest at the discount rate on their accounts c. eliminates the need for reserve requirements because banks are not liable for any depositor losses d. works in coordination with reserve requirements to ensure depositor confidence, preventing bank runs.

Explain monetary neutrality as a concept of monetary economics.

Question 8 True or False. A living will is a document that is ambulatory until the death of the decedent and then it describes how the decedent's property should be distributed.     True     False   Question 9 Donald puts a lot of money into a bucket and gives Bernie a power of appointment over the money in the bucket. Bernie has the power to distribute that money only to himself, his creditors, his estate, or his estate's creditors. What is the correct name for his power of appointment? It is a/an:     General power of appointment     Limited power of appointment   Question 10 True or False. The spousal consent rules for the annual exclusion require the non-donor spouse to consent to all gifts made by the donor spouse in that year; he or she cannot select which gifts he or she will join and which he or she will not.     True     False

Could you add more information regarding the below statement? "I do agree with the notion that the Federal Reserve is the most important financial institution in the world. The reason being that it plays such a pivotal role in the economy - for better or for worse. For example, the federal reserve supervises banking institutions and provides many financial services to the U.S government. In addition, the federal reserve has the power to regulate the economy when it is unstable. For example, the Federal Reserve has the ability to manipulate interest rates in order to stabilize the economy when it is needed most. Overall, without the Fed, the economy would have a much more difficult time maintaining itself. When it comes to inflation specifically, I do believe that the Federal Reserve should step in as it is their responsibility. I think that increasing interest rates could be a significant help, but I think that decreasing the money supply/circulation as well as selling bonds could help…