国际经济学题库20464183.doc

International Economics, 8e (Krugman) Chapter 14 Money, Interest Rates, and Exchange Rates 14.1 Money Defined: A Brief Review 1) The exchange rate between currencies depends on A) the interest rate that can be earned on deposits of those currencies. B) the interest rate that can be earned on deposits of those currencies and the expected future exchange rate. C) the expected future exchange rate. D) national output. E) None of the above. Answer: B Question Status: Previous Edition 2) Money serves as A) a medium of exchange. B) a unit of account. C) a store of value. D) All of the above. E) Only A and B. Answer: D Question Status: Previous Edition 3) Money includes A) currency. B) checking deposits held by households and firms. C) deposits in the foreign exchange markets. D) Both A and B. E) A, B, and C. Answer: D Question Status: Previous Edition 4) In the United States at the end of 2006, the total money supply, M1, amounted to approximately A) 10 percent of that years GNP. B) 20 percent of that years GNP. C) 30 percent of that years GNP. D) 40 percent of that years GNP. E) 50 percent of that years GNP. Answer: A Question Status: Previous Edition 5) What are the main functions of money? Answer: Money serves in general three important functions: a medium of exchange; a unit of account; and a store of value. As a medium of exchange, money avoids going back to a barter economy, with the enormous search costs connected with it. As a unit of account, the use of money economizes on the number of prices an individual faces. Consider an economy with N goods, then one needs only (N - 1) prices. As a store of value, the use of money in general ensures that you can transfer wealth between periods. Question Status: Previous Edition 14.2 The Demand for Money by Individuals 1) Individuals base their demand for an asset on A) the expected return