Yr12: Understanding the Money Market and Monetary Policy

Front

What is the narrowest definition of money referred to in the text?

Back

M1 money

Front

Which of the following is included in M1 money? Stocks, Real estate, Traveler checks, Bonds

Back

Traveler checks

Front

What does the money market graph primarily show?

Back

Supply and demand for money

Front

Why is cash considered to have high liquidity?

Back

It is easy to convert to other forms

Front

What happens to the quantity demanded of money when interest rates fall?

Back

It increases

Front

What is NOT a shifter of the demand for money? Price level, Income, Technology in banking, Stock market performance

Back

Stock market performance

Front

What does the vertical supply curve of money indicate?

Back

It is set by the central bank

Front

What is the effect of expansionary monetary policy?

Back

Increases money supply

Front

Which of the following is NOT a shifter of the money supply? Consumer confidence, Open market operations, Discount rate, Reserve requirement

Back

Consumer confidence

Front

What is the primary purpose of contractionary monetary policy?

Back

To decrease inflation