ECON103 M2

If the money supply increases 12 percent, velocity decreases 4 percent, and the price level increases 5 percent, then the change in real GDP must be ___ percent.

3

According to the Fisher Effect, the nominal interest rate moves one-for-one with changes in the:

Expected inflation rate

The rate of inflation is the:

Percentage change in the level of prices

Most spells of unemployment are ___ term, and most weeks of unemployment are attributable to ____-term unemployment

Short, long

Between 1880 and 1896, the price level in the United States fell 23 percent. This movement was ___ for bankers of the northeast and ____ for farmers of the south and west.

Good, bad

Unions contribute to structural unemployment when collective bargaining results in wages:

Above the equilibrium level

The ex ante real interest rate is based on ____ inflation, while the ex post real interest rate is based on ____ inflation.

Expected, actual

The hyperinflation experienced by interwar germany illustrates how fiscal policy can be connected to monetary policy when government expeditures are financed by:

Printing large quantities of money

All of the following are considered major functions of money expect as a

Way to display wealth

In a traditional reserve banking system, banks create money when they

Make loans

The money supply will decrease if the

Currency-deposit ratio increases

The quantity of money in the united states is essentially controlled by the:

Federal reserve

If the quantity of real money balances is ky, where k is a constant, then velocity is

1/k

In prisoner of war camps during world war II, the “currency” used was:

Cigarettes

A policy that decreases the job separation rate ___ the natural rate of unemployment

Will decrease

The quantity theory of money assumes that

Velocity is constant

If the monetary base equals $400 billion and the money multiplier equals 2, then the money supply equals

$800 billion

Frictional unemployment is unemployment caused by

The time it takes workers to search for a job

To make a trade in a barter economy requires:

A double coincidence of wants