BRAC-102-Ch30-inclass-quiz

When the price level falls, the number of dollars needed to buy a representative basket of goods

• a. increases, so the value of money rises.
• b. increases, so the value of money falls.
• c. decreases, so the value of money rises.
• d. decreases, so the value of money falls.
• e. none of the above

When the money market is drawn with the value of money on the vertical axis, if the value of money is below the equilibrium level,

• a. the price level will rise.
• b. the value of money will rise.
• c. money demand will shift left.
• d. money demand will shift right
• e.. None of the above

According to the classical dichotomy, which of the following increases when the money supply increases?

• a. the real interest rate
• b. real GDP
• c. the real wage
• d. None of the above increases.

Assuming that V is constant, the quantity equation implies that an increase in M could result in

• a. an increase in the price level.
• b. an increase in real GDP.
• c. an increase in nominal GDP.
• d. any of the above.
• e. None of the above

The cost of changing price tags and price listings is known as

• a. inflation-induced tax distortions.
• b. relative-price variability costs.
• c. shoeleather costs.
• d. menu costs.
• e. None of the above