4.5 assessment

An increase in money demand will cause which of the following?

A decrease in bond prices

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

An increase in real income

An increase in the price level will most likely cause which of the following?

An increase in the demand for money

Which of the following shifts the money demand curve to the right?

An increase in the price level

The aggregate demand curve is downward sloping because an increase in the general price level will cause the demand for money, interest rates, and investment to change in which of the following ways?

Demand for money, Increase. Interest Rates, Increase. Investment, Increase.

An increase in government spending will affect the demand for money and nominal interest rates in which of the following ways?

Demand for money, increase. Nominal Interest Rates, Increase.

With a constant money supply, if the demand for money decreases, the equilibrium interest rate and quantity of money will change in which of the following ways?

Interest Rate, decrease. Quantity of money, not change.

An increase in inflationary expectations will most likely affect nominal interest rates and bond prices in which of the following ways in the short run?

Nominal Interest Rates, Increase. Bond Prices, decrease.

Nominal interest rates and prices of previously issued bonds will be affected in which of the following ways when money demand exceeds money supply?

Nominal interest rates will increase, and bond prices will decrease.

Which of the following will occur in the money market when the aggregate price level increases?

The demand for money will increase and nominal interest rates will increase.

If there is an increase in nominal income, which of the following will most likely occur in the short run?

The demand for money will increase.

The amount of money that the public wants to hold is $10 billion. With a monetary base of $2 billion and a money multiplier of 4, which of the following will most likely occur?

The nominal interest rate will increase.

Which of the following is true when interest rates rise?

The opportunity cost of holding cash increases.

An increase in which of the following will cause an increase in the demand for money?

The price level

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

The quantity of money demanded will decrease.

Expansionary fiscal policy will most likely result in

an increase in nominal interest rates

The amount of money that the public wants to hold in the form of cash will

decrease if interest rates increase

The money demand curve is downward sloping because

people hold less money as the opportunity cost of holding money rises

The demand curve for money shifts to the right when

the nominal gross domestic product increases