中级宏观经济学付费版题库

Name:Date:

1.Therateofinflationisthe:

A)medianlevelofprices.

B)averagelevelofprices.

C)percentagechangeinthelevelofprices.

D)measureoftheoveralllevelofprices.

2.Thedefinitionofthetransactionsvelocityofmoneyis:

A)moneymultipliedbypricesdividedbytransactions.

B)transactionsdividedbypricesmultipliedbymoney.

C)moneydividedbypricesmultipliedbytransactions.

D)pricesmultipliedbytransactionsdividedbymoney.

3.Iftherearc100rransactionsinayearandtheaveragevalueofeachtransactionis$10,

thenifthereis$200ofmoneyintheeconomy,transactionsvelocityistimesper

year02

A)

B)02

5

n)1o

4.Ifthetransactionsvelocityofmoneyremainsconstantwhilethequantityofmoney

doubles,the:

A)priceoftheaveragetransactionmustdouble.

B)numberoftransactionsmustremainconstant.

C)priceoftheaveragetransactionmultipliedbythenumberoftransactionsmust

remainconstant.

D)priceoftheaveragetransactionmultipliedbythenumberoftransactionsmust

double.

5.Thequantityequation,viewedasanidentity,isadefinitionofthe:

A)quantityofmoney.

B)quantityoftransactions.

C)pricelevel.

D)transactionsvelocityofmoney.

6

incomevelocityofmoney:

A\

/)isdefinedintheidentityMV=PY.

B\

71isdefinedintheidentityMV=PT.

c\

/!isthesamethingasthetransactionsvelocityofmoney.

D

isthesameasthenumberoftimesadollarbillchangeshands.

7.Thetransactionsvelocityofmoneyindicatestheinagivenperiod,whilethe

incomevelocityofmoneyindicatestheinagivenperiod.

A)numberoftransactions;amountofincomeearned

B)quantityofmoneyusedfbrtransactions;quantityofmoneypaidasincome

C)numberoftimesadollarbillchangeshands;numberoftimesadollarbillenters

someone'sincome

D)volumeoftransactions;flowofincome

8.Realmoneybalancesequalthe:

A)sumofcoin,currency,andbalancesincheckingaccounts.

B)amountofmoneyexpressedintermsofthequantityofgoodsandservicesitcan

purchase.

C)numberofdollarsusedasamediumofexchange.

D)quantityofmoneycreatedbytheFederalReserve.

9.Iftheaveragepriceofgoodsandservicesintheeconomyequals$10andthequantityof

moneyintheeconomyequals$200,000,thenrealbalancesintheeconomyequal:

A)10.

B)20,000.

C)200,000.

D)2,000,000.

10.Thedemandfbrrealmoneybalancesisgenerallyassumedto:

AX

XIbeexogenous.

B\

/)beconstant.

c\

/!increaseasrealincomeincreases.

D\

/)decreaseasrealincomeincreases.

11.IfthequantityofrealmoneybalancesiskY,whereAisaconstant,thenvelocityis:

A)k.

B)\/k.

C)kP.

D)P/k.

12.Ifthedemandforrealmoneybalancesisproportionaltorealincome,velocitywill:

A)increaseasincomeincreases.

B)increaseasincomedecreases.

C)varydirectlywiththeinterestrate.

D)remainconstant.

13.Whenthedemandformoneyparameter,k、islarge,thevelocityofmoneyisand

moneyischanginghands

A)large;frequently

B)large;infrequently

C)small;frequently

D)small;infrequently

14.Considerthemoneydemandfunctionthattakesthefbrm(M/P)d=kY,whereMisthe

quantityofmoney,Pisthepricelevel,攵isaconstant,andYisrealoutput.Ifthemoney

supplyisgrowingata10percentrate,realoutputisgrowingata3percentrate,andkis

constant,whatistheaverageinflationrateinthiseconomy?

A)3percent

B)7percent

C)10percent

D)13percent

15.Theincomevelocityofmoneyincreasesandthemoneydemandparameterk

whenpeoplewanttoholdmoney.

AX

/uincreases;more

B\

/—increases;less

cX

/)decreases;more

D\

zldecreases;less

16.Thequantityequationformoney,byitself:

A)maybethoughtofasadefinitionforvelocityofmoney.

B)impliesthatthevelocityofmoneyisconstant.

C)impliesthatthepricelevelisproportionaltothemoneysupply.

D)impliesthatrealgrossdomesticproduct(GDP)isproportionaltothemoney

supply.

17.Thequantitytheoryofmoneyassumesthat:

A)incomeisconstant.

B)velocityisconstant.

C)pricesarcconstant.

D)themoneysupplyisconstant.

18.Ifincomevelocityisassumedtobeconstant,butnootherassumptionsaremade,the

levelofisdeterminedbyM.

AX

71prices

B\

/!income

c\

—/transactions

DX

/InominalGDP

19.Ifvelocityisconstantand,inaddition,thefactorsofproductionandtheproduction

functiondeterminerealGDP,then:

A)thepricelevelisproportionaltothemoneysupply.

B)realGDPisproportionaltothemoneysupply.

C)thepricelevelisfixed.

D)nominalGDPisfixed.

20.Inthelongrun,accordingtothequantitytheoryofmoneyandtheclassical

macroeconomictheory,ifvelocityisconstant,thendeterminesrealGDPand

determinesnominalGDP.

A)theproductivecapabilityoftheeconomy;themoneysupply

B)themoneysupply;theproductivecapabilityoftheeconomy

C)velocity;themoneysupply

D)themoneysupply;velocity

21.Accordingtothequantitytheoryofmoney,ultimatecontrolovertherateofinflationin

theUnitedStatesisexercisedby:

A)theOrganizationofPetroleumExportingCountries(OPEC).

B)theU.S.Treasury.

C)theFederalReserve.

D)privatecitizens.

22.Accordingtothequantitytheoryofmoney,ifmoneyisgrowingata10percentrateand

realoutputisgrowingata3percentrate,butvelocityisgrowingatincreasinglyfaster

ratesovertimeasaresultoffinancialinnovation,therateofinflationmustbe:

A)increasing.

B)decreasing.

C)7percent.

D)constant.

23.Ifthemoneysupplyincreases12percent,velocitydecreases4percent,andtheprice

levelincreases5percent,thenthechangeinrealGDPmustbepercent.

A)3

B)4

C)9

D)11

24.PercentagechangeinPisapproximatelyequaltothepercentagechangein:

A)M.

B)MminuspercentagechangeinY.

C)MminuspercentagechangeinYpluspercentagechangeinvelocity.

D)MminuspercentagechangeinYminuspercentagechangeinvelocity.

25.UsingaverageratesofmoneygrowthandinflationintheUnitedStatesovermany

decades,FriedmanandSchwartzfoundthatdecadesofhighmoneygrowthtendedto

haveratesofinflationanddecadesoflowmoneygrowthtendedtohave

ratesofinflation.

A)high;high

B)high;low

C)low;low

D)low;high

26.Usingdecade-longdataacrosscountriesfrom2000-2010,countrieswithhighmoney

growthtendtohaveinflation.

A)high

B)low

C)constant

D)decreasing

rightofseigniorageistherightto:

Ax

zulevytaxesonthepublic.

B\

/!borrowmoneyfromthepublic.

c\

zndraftcitizensintothearmedforces,

DX

/)printmoney.

28."Inflationtax'meansthat:

A\

zlasthepricelevelrises,taxpayersarepushedintohighertaxbrackets.

B\

/!asthepricclevelrises,therealvalueofmoneyheldbythepublicdecreases.

c\

7astaxesincrease,therateofinflationalsoincreases.

D

inahyperinflation,thechiefsourceoftaxrevenueisoftentheprintingofmoney.

29.Theinflationtaxispaid:

A)onlybythecentralbank.

B)byallholdersofmoney.

C)onlybygovernmentbondholders.

D)equallybyeveryhousehold.

30.Thepercentageofgovernmentrevenueraisedbyprintingmoneyhasusuallyaccounted

fbr:

A)morethan10percentofgovernmentrevenueintheUnitedStates.

B)lessthan3percentofgovernmentrevenueintheUnitedStates.

C)lessthan3percentofgovernmentrevenueinItaly.

D)lessthan3percentofgovernmentrevenueinGreece.

31.DuringtheAmericanRevolution,thepriceofgoldmeasuredincontinentaldollars

increasedtomorethantimesitspreviouslevel.

A)2

B)10

C)50

D)100

32.Therealinterestrateisequaltothe:

A

amountofinterestthatalenderactuallyreceiveswhenmakingaloan.

B\

/Jnominalinterestrateplustheinflationrate.

c\

7lnominalinterestrateminustheinflationrate.

DX

/Inominalinterestrate.

33.Ifthenominalinterestrateis1percentandtheinflationrateis5percent,thereal

interestrateis:

A

1percent.

B\

/!6percent.

c\

7l-4percent.

D

-5percent.

34.Iftherealinterestratedeclinesby1percentandtheinflationrateincreasesby2percent,

thenominalinterestratemust:

A\

zlincreaseby2percent,

B\

ZJincreaseby1percent,

c\

z)remainconstant,

D\

71decreaseby1percent.

35.Iftherealinterestrateandrealnationalincomeareconstant,accordingtothequantity

theoryandtheFishereffect,a1percentincreaseinmoneygrowthwillleadtorisesin:

AX

/Iinflationof1percentandthenominalinterestrateoflessthan1percent,

B\

/1inflationof1percentandthenominalinterestrateof1percent,

c\

z)inflationof1percentandthenominalinterestrateofmorethan1percent,

D\

/—bothinflationandthenominalinterestrateoflessthan1percent.

36.Theonc-to-oncrelationbetweentheinflationrateandthenominalinterestrate,the

Fishereffect,assumesthatthe:

AX

/umoneysupplyisconstant.

B\

/—velocityisconstant.

cX

/)inflationrateisconstant.

D\

zlrealinterestrateisconstant.

37.Accordingtothequantitytheorya5percentincreaseinmoneygrowthincreases

inflationbypercent.AccordingtotheFisherequationa5percentincreaseinthe

rateofinflationincreasesthenominalinterestrateby.

A\

!

/

B\

!

/

cX

)

/

D\

)

/

38.AccordingtothequantitytheoryandtheFisherequation,ifthemoneygrowthincreases

by3percentandtherealinterestrateequals2percent,thenthenominalinterestrate

willincrease:

A)2percent.

B)3percent.

C)5percent.

D)6percent.

39.Intheclassicalmodel,accordingtothequantitytheoryandtheFisherequation,an

increaseinmoneygrowthincreases:

A)output.

B)velocity

C)thenominalinterestrate.

D)therealinterestrate.

40.Evidencefromthepast40yearsintheUnitedStatessupportstheFishereffectand

showsthatwhentheinflationrateishigh,theinterestratetendstobe

A)nominal;high

B)nominal;low

C)real;high

D)real;low

41.exanterealinterestrateisequaltothenominalinterestrate:

A\

!

/minustheinflationrate.

B\

!

/plustheinflationrate.

c

minustheexpectedinflationrate.

DX

I

/plustheexpectedinflationrate.

42.Whenapersonpurchasesa90-dayTreasurybill,heorshecannotknowthe:

AX

/Iexpostrealinterestrate.

B\

/!exanterealinterestrate,

c\

/)nominalinterestrate,

D\

7>expectedrateofinflation.

43.Equilibriuininthemarketforgoodsandservicesdeterminestheinterestrate

andtheexpectedrateofinflationdeterminestheinterestrate.

A)exantereal;exantenominal

B)expostreal;expostnominal

C)exantenominal;expostreal

D)expostnominal;expostreal

44.Theexanterealinterestrateisbasedoninflation,whiletheexpostrealinterest

rateisbasedoninflation.

AX

71expected;actual

B\

/!core;actual

c\

/—actual;expected

DX

/Iexpected;core

45.AccordingtotheFishereftect,thenominalinterestratemovesone-tor-onewith

changesinthe:

A\

/!inflationrate.

B1

/expectedinflationrate.

cX

/Iexanterealinterestrate.

D\

7>expostrealinterestrate.

46.ApositiverelationshipbetweennominalinterestratesandinflationintheUnitedStates

isobviousin:

A

bothrecentdataandnineteenth-centurydata.

B\

/!recentdatabutnotninctccnth-ccnturydata.

c\

z)nineteenth-centurydatabutnotrecentdata.

D.

<)neithernineteenth-centurydatanorrecentdata.

47.Theexpostrealinterestratewillbegreaterthantheexanterealinterestratewhenthe:

AX

/Irateofinflationisincreasing,

B\

/!rateofinflationisdecreasing.

c\

/)actualrateofinflationisgreaterthantheexpectedrateofinflation.

D\

7>actualrateofinflationislessthantheexpectedrateofinflation.

48.InrecentU.S.experience,inflationhas:

A)beenpersistentfromyeartoyear,whereasinthenineteenthcenturyinflationhad

littlepersistence.

B)beenpersistentfromyeartoyear,andthiswasalsotrueintheninetesnthcentury.

C)notbeenpersistentfromyeartoyear,akhoughitwaspersistentinthenineteenth

century.

D)notbeenpersistentfromyeartoyear,andthesamewastrueinthenineteenth

century.

49.Theopportunitycostofholdingmoneyisthe:

A)nominalinterestrate.

B)realinterestrate.

C)federalfundsrate.

D)prevailingTreasurybillrate.

50.Therealreturnonholdingmoneyis:

A\

/!therealinterestrate.

B1

/minustherealinterestrate,

cX

/Itheinflationrate.

D\

7>minustheinflationrate.

51.Iftherealreturnongovernmentbondsis3percentandtheexpectedrateofinflationis4

percent,thenthecostofholdingmoneyispercent.

A)1

B)3

C)4

D)7

52.Thegeneraldemandfiinctionfbrrealbalancesdependsonthelevelofincomeandthe:

AX

/Irealinterestrate,

B\

/!nominalinterestrate,

c\

/)rateofinflation,

D\

>7pricelevel.

53.Ifthenominalinterestincreases,then:

A)themoneysupplyincreases.

B)themoneysupplydecreases.

C)thedemandfbrmoneyincreases.

D)thedemandfbrmoneydecreases.

54.Considerthemoneydemandfunctionthattakestheform(M/Py=Y74z,whereMisthe

quantityofmoney,Pisthepricelevel,Yisrealoutput,andiisthenominalinterestrate.

Whatistheaveragevelocityofmoneyinthiseconomy?

AX

/Ii

B\

zl4/

c\

/!l/4z

D

0.25

55.IftheFedannouncesthatitwillraisethemoneysupplyinthefuturebutdoesnot

changethemoneysupplytoday,

A)boththenominalinterestrateandthecurrentpricelevelwilldecrease.

B)thenominalinterestratewillincreaseandthecurrentpricelevelwilldecrease.

C)thenominalinterestratewilldecreaseandthecurrentpricelevelwillincrease.

D)boththenominalinterestrateandthecurrentpricelevelwillincrease.

56.Ifthemoneysupplyisheldconstant,thenanincreaseinthenominalinterestratewill

thedemandformoneyandthepricelevel.

A

increase;increase

B\

/!increase;decrease

c\

z)decrease;increase

D.

<)decrease;decrease

57.Ifthedemandfbrmoneydependsonthenominalinterestrate,thenviathequantity

theoryandtheFisherequation,thepriceleveldependson:

A)onlythecurrentmoneysupply.

B)onlytheexpectedfuturemoneysupply.

C)boththecurrentandexpectedfuturemoneysupply.

D)neitherthecurrentnortheexpectedfuturemoneysupply.

58.Accordingtotheclassicaltheoryofmoney,reducinginflationwillnotmakeworkers

richerbecausefirmswillincreaseproductpriceseachyearandgiveworkers

______raises.

A)more;larger

B)more;smaller

C)less;larger

D)less;smaller

59.Accordingtotheclassicaltheoryofmoney,inflationdoesnotmakeworkerspoorer

becausewagesincrease:

A)fasterthantheoverallpricelevel.

B)moreslowlythantheoverallpricelevel.

C)inproportiontotheincreaseintheoverallpricelevel.

D)inrealtermsduringperiodsofinflation.

60.Surveyevidenceindicatesthateconomistsworrythegeneralpublicdocsabout

pricesincreasingmorerapidlythantheirincomes.

A)morethan

B)lessthan

C)aboutthesameas

D)moreintenselythan

61.WhichofthefollowingisNOTaneffectofexpectedinflation?

A)causeslowerrealwages.

B)leadstoshoeleathercosts.

C)increasesmenucosts.

D)leadstotaxingofnominalcapitalgainsthatarenotreal.

62.Theinconvenienceassociatedwithreducingmoneyholdingstoavoidtheinflationtaxis

called:

A)menucosts.

B)shoeleathercosts.

C)variableyardstickcosts.

D)fixedcosts.

costsofreprintingcatalogsandpricelistsbecauseofinflationarecalled:

Ax

u

zmenucosts.

B\

!

/shoeleathercosts.

c\

n

zvariableyardstickcosts.

D\

i

/fixedcosts.

64.Inflationthevariabilityofrelativepricesandallocativeefficiency,

Ax

l

zincreases;increases

B

increases;decreases

c\

)

zdecreases;decreases

\

D!

/decreases;increases

65.Devotingresourcestoavoidingthecostsofexpectedinflationleadsto:

A)eliminatingthecostsofexpectedinflation.

B)fewerrelativepricechanges.

C)economicinefficiency.

D)adecreaseinthetransactionvelocityofmoney.

66.Variableinflationhurtsbothdebtorsandcreditorsbecause:

A\

J

/inflationmakesthemoney-fixedassetsofcreditorsworthless,

B\

!

/inflationmakesthemoney-fixedliabilitiesofdebtorsworthless,

c\

)

zmostdebtorsandcreditorsarcriskaverse,

D

mostdebtorsandcreditorsareriskneutral.

67.Inthecaseofanunanticipatedinflation:

A)creditorswithanunindexedcontractarchurtbecausetheygetlessthanthey

expectedinrealterms.

B)creditorswithanindexedcontractgainbecausetheygetmorethantheycontracted

fbrinnominalterms.

C)debtorswithanunindexedcontractdonotgainbecausetheypayexactlywhatthey

contractedfbrinnominalterms.

D)debtorswithanindexedcontractarehurtbecausetheypaymorethanthey

contractedfbrinnominalterms.

68.Thecostsofunexpectedinflation,butnotofexpectedinflation,arc:

A)menucosts.

B)thearbitraryredistributionofwealthbetweendebtorsandcreditors.

C)unintendeddistortionsofindividualtaxliabilities

D)thecostsofrelativepricevariability.

69.Between1880and1896,thepricelevelintheUnitedStatesfell23percent.This

movementwasfbrbankersoftheNortheastandfbrfannersofthe

SouthandWest.

A\

zlbad;bad

B\

/!good;good

c\

z)good;bad

D\

/—bad;good

70.Avariablerateofinflationisundesirablebecause:

A)debtorsandcreditorscannotprotectthemselvesbyindexingcontracts.

B)shoeleathercostsaregreaterundervariableinflationthanunderconstantinflation.

C)menucostsarcgreaterundervariableinflationthanunderconstantinflation.

D)variableinflationleadstogreateruncertaintyandriskascomparedtoconstant

inflation.

71.Onepossiblebenefitofmoderateinflationis:

A)areductioninboredomattributabletothechangingprices.

B)theeliminationofmenucosts.

C)betterfiinctioninglabormarkets.

D)increasedcertaintyaboutthefuture.

72.Ifinflationis6percentandaworkerreceivesa4percentnominalwageincrease,then

theworker'srealwage:

A)increased4percent.

B)increased2percent.

C)decreased2percent.

D)decreased6percent.

73.Ifnominalwagescannotbecut,thentheonlywaytoreducerealwagesisby:

A)adjustmentsviainflation.

B)unions.

C)legislation.

D)productivityincreases.

74.Arateofinflationthatexceeds50percentpermonthistypicallyreferredtoasa(n):

A)conflagration.

B)hyperinflation.

C)deflation.

D)disinflation.

75.Comparedtoperiodsoflowerratesofinflation,duringahyperinflationallofthe

followingoccurexcept.

A)shoeleathercostsincrease.

B)menucostsbecomelarger.

C)relativepricesdoabetterjobofreflectingtruescarcity.

D)taxdistortionsincrease.

76.Hyperinflationsultimatelyaretheresultofexcessivegrowthratesofthemoneysupply;

theunderlyingmotivefbrtheexcessivemoneygrowthratesisfrequentlya

D

gAc\

/!desiretoincreasepricesthroughouttheeconomy.

B\

/!needtogeneraterevenuetopayfbrspending.

c

responsibilitytoincreasenominalinterestratesbyincreasingexpectedinflation.

D\

7inabilitytoconductopen-marketoperations.

77.Whichofthefbllovvingwouldmostlikelybecalledahyperinflation?

A)Priceincreasesaveraged300percentperyear.

B)Theinflationratewas10percentperyear.

C)RealGDPgrewatarateof12percentoverayear.

D)Astockmarketindexroseby1,000pointsoverayear.

instancesofhyperinflation,thedelaysinvolvedincollectingtaxesoftenresultin:

A

decreasedrealgovernmenttaxrevenue.

B\

71largecapitalgainsfbrcreditors.

c\.

/Jhighershoeleathercostsofinflation.

D\

zlhigherexanterealinterestrates.

79.Duringhyperinflationrealtaxrevenueofthegovernmentoftendropssubstantially

becauseofthe:

Ax

zldelaybetweenwhenataxisleviedandwhenitiscollected.

B

significantlygreatermenucostsofprintingtaxforms.

c\

z)additionaldeductionstakenfbrincreasedshoclcathcrcosts.

D\

/!greateruncertaintyassociatedwithextremeratesofinflation.

80.Themajorsourceofgovernmentrevenueinmostcountriesthatareexperiencing

hyperinflationis:

A)customsduties.

B)incometaxes.

C)seigniorage.

D)borrowing.

81.Inpractice,inordertostopahyperinflation,inadditiontostoppingmonetarygrowth,

thegovernmentmust:

A)lowertaxesandraisegovernmentspending.

B)raisetaxesandreducegovernmentspending.

C)changefromonekindofcurrencytoanother.

D)callfbranewelection.

82.Toendahyperinflation,agovernmenttryingtoreduceitsrelianceonseigniorage

would:

A

printmoremoney.

B\

/Jraisetaxesandcutspending.

c\

7llowertaxesandincreasespending.

DX

/Ilowerinterestrates.

83.Mosthyperinflationsendwithreformsthateliminatetheneedfbr

A\

zlmonetary;taxes

B\

/!monetary;currency

c

fiscal;seigniorage

D

fiscal;currency

84.ThehyperinflationexperiencedbyinterwarGermanyillustrateshowfiscalpolicycanbe

connectedtomonetarypolicywhengovernmentexpendituresarcfinancedby:

A)newtaxes.

B)borrowingintheopenmarket.

C)printinglargequantitiesofmoney.

D)sellinggold.

85.InZimbabweinthe1990sthegovernmentresortedtoprintingmoneytopaythesalaries

ofgovernmentemployeesbecause:

A)itwasameanstoavoidpricecontrols.

B)ofhighratesofinflation.

C)ofdecliningtaxrevenues.

D)ofaneedtostimulatetheeconomy.

86.Whichofthefollowingisanexampleofarelativeprice?

A)therealinterestrate

B)thecapitalstock

C)thedollarv/agcperhour

D)thepricelevel

87.Variablesexpressedintennsofphysicalunitsorquantitiesarecalledvariables.

A)real

B)nominal

C)endogenous

D)exogenous

88.Variablesexpressedintermsofmoneyarecalledvariables.

A)real

B)nominal

C)endogenous

D)exogenous

89.Anexampleofarealvariableisthe:

A)dollarwageapersonearns.

B)quantityofgoodsproducedinayear.

C)pricelevel.

D)nominalinterestrate.

90.Anexampleofanominalvariableisthe:

A)moneysupply.

B)quantityofgoodsproducedinayear.

C)relativepriceofbread.

D)realwage.

91.Theclassicaldichotomy:

A)cannotholdifmoneyis“neutral.”

B)issaidtoholdwhenthevaluesofrealvariablescanbedetenninedwithoutany

referencetonominalvariablesortheexistenceofmoney.

C)fullydescribestheworldinwhichwelive,especiallyintheshortrun.

D)arisesbecausemoneydependsonthenominalinterestrate.

92.Accordingtotheclassicaldichotomy,whenthemoneysupplydecreases,will

decrease.

A)realGDP

B)consumptionspending

C)thepricelevel

D)investmentspending

93.Theconceptofmonetaryneutralityintheclassicalmodelmeansthatanincreaseinthe

moneysupplywillincrease:

A

realGDP.

B\

/Jrealinterestrates.

c\

7lnominalinterestrates.

DX

/Ibothsavingandinvestmentbythesameamount.

94.Thecharacteristicoftheclassicalmodelthatthemoneysupplydoesnotaffectreal

variablesiscalled:

A)themonetarybasis.

B)monetarypolicy.

C)thequantitytheoryofmoney.

D)monetaryneutrality

95.Thetheoreticalseparationofrealandmonetaryvariablesiscalled:

A)theclassicaldichotomy.

B)monetaryneutrality.

C)theFishereffect.

D)thequantitytheoryofmoney.

96.Ifthepriceleveldependsonboththecurrentmoneysupplyandfutureexpectedmoney

supplies,inordertostopahyperinflation,acentralbankmaytrytoestablishcredibility

by:

A)achievingincreasedpoliticalindependencefromthegovernment.

B)increasingrevenuefromseigniorage.

C)encouragingincreasedgovernmentspendingandtaxcuts.

D)undertakinglargeropen-marketpurchases.

97.Asmallcountrymightwanttousethemoneyofalargecountryratherthanprintitsown

moneyifthesmallcountry:

A)islikelytobeunstable,whereasthelargecountryislikelytobestable.

B)islikelytobestable,whereasthelargecountryislikelytobeunstable.

C)needstherevenuefbrseigniorage.

D)wantstocontrolitsowninflationrate.

98.