Macroeconomics with Zhang HW3

Changes in nominal variables are determined mostly by the quantity of money and the monetary system according to

When conducting an open-market purchase, the Fed

Under a fractional-reserve banking system, banks

when inflation rises, firms make

Refer to figure 30-3. If the relevant money-supply curve is the one labeled MS1, then the equilibrium price level is

The nominal interest rate is 4%, the inflation rate is 1%, and the tax rate is 20%. Given US tax laws, how is after-tax real return computed?

Rank the following assets from most to least liquid; stocks, fine art, and currency

according to the principle of monetary neutrality, a decrease in the money supply will not change

you bought some shares of stock and, over the next year, the price per share increased by 5 percent, as did the price level. Before taxes, you experienced

according to the classical dichotomy, which of the following is affected by monetary factors? Nominal wages, the price level, and nominal GDP.

In a system of 100-percent-reserve banking

Katarina puts money into an account. One year later, she sees that she has 6 percent more dollars and that her money will buy 2 percent more goods.

If the reserve requirement is 15 percent a bank desires to hold no excess reserves and it receives a new deposit of $10, then this bank

(T/F) Fiat money has no intrinsic value

If the discount rate is raised, then banks borrow

Suppose over some period of time the money supply tripled, velocity fell by half, and real GDP doubled. According to the quantity equation the price level is now

If the reserve ratio is 4 percent, then $81,250 of new money can be generated by

If velocity and output were nearly constant, then

Refer to figure 30-2. At the end of the 2009 the relevant money-demand curve was the one labeled MD2. At the end of 2010 the relevant money-demand curve was the one labeled MD1. Assuming the economy is always in equilibrium, what was the economy's approximate inflation rate for 2010?

Any item that people can use to transfer purchasing power from the present to the future is called

The manager of the bank where you work tell you that your bank has $5 million in excess reserves. She also tells you that the bank has $300 million in deposits and $255 million dollars in loans. given this information you find that the reserve requirement must be

If the reserve ratio is 15 percent, and banks do not hold excess reserves, and people hold only deposits and no currency, then when the Fed sells $65 million worth of bonds to the public, bank reserves

If the reserve ratio is 10 percent, the money multiplier is

when the money market is drawn with the value of money on the vertical axis, if the federal reserve sells bonds, then the money supply curve

if P=2 and Y=1000 then which of the following pairs of values are possible?

The nominal interest rate is 3.5 percent and the inflation rate is 2 percent. What is the real interest rate?

A bank's reserve ratio is 5 percent and the bank has $1000 in deposits. Its reserves amount to

(T/F) Relative price variability rises with inflation, leading to a misallocation of resources.

Suppose that monetary neutrality and the Fisher effect both hold. An increase in the money supply growth rate increases

When the money market is drawn with the value of money on the vertical axis, an increase in the price level causes a

M1 equals currency plus demand deposits plus

Given the following information, what are the values of M1 and M2? small time deposits $1,300 billion demand deposits & checkable deposits $600 billion savings deposits $1,500 billion money market mutual funds $1,200 billion Traveler's checks $50 billion Large time deposits $1,200 billion currency $200 billion Miscellaneous categories in M2 $50 billion