金融英语练习题二章.docVIP

The Demand for Money 1. Irving Fisher took the view that the institutional features of the economy which affect velocity change _____ over time so that velocity will be fairly _____ in the short run. A) rapidly; erratic B) rapidly; stable C) slowly; stable D) slowly; erratic Answer: C 2. If the money supply is 600 and nominal income is 3,000, the velocity of money is A) 5. B) 50. C) 1/5. D) undefined. Answer: A 3. According to the quantity theory of money demand, A) an increase in interest rates will cause the demand for money to fall. B) a decrease in interest rates will cause the demand for money to increase. C) interest rates have no effect on the demand for money. D) an increase in money will cause the demand for money to fall. Answer: C 3. The Cambridge approach to the demand for money did not rule out the A) effects of interest rates on the demand for money. B) effects of wealth on the demand for money. C) effects of income on the demand for money. D) effects of any of the above. Answer: D 4. Velocity, over the business cycle, tends to A) rise during economic contractions. B) fall during economic expansion. C) stay constant. D) fall during economic contractions. Answer: D 5. Keyness liquidity preference theory indicates that the demand for money A) is purely a function of income, and interest rates have no effect on the demand for money. B) is purely a function of interest rates, and income has no effect on the demand for money. C) is both a function of income and interest rates. D) is both a function of government spending and income. Answer: C 6. Keyness argued that when interest rates were high relative to some normal value, people would expect bond prices to _____ so the quantity of money demanded would _____. A) increase; increase B) increase; decrease C) decrease; decrease D) decrease; increase Answer: B 7. Keyness model of the demand for money suggests that velocity is _____ related to _____. A) positively; interest rat