Hi Tutor can you help me with the following. thanks

______1.

One reason why inflation if undesirable is that

a.it causes loss to lenders and savers who do not anticipate it.

b.it benefits buyers, not sellers.

c.wages rise faster than profits and prices.

d.it puts an extra burden on people who are in debt.

_____ 2.

For money to serve as an efficient medium of exchange, it must have all but which one of the following characteristics? a. general acceptability

b.convertibility

c.high value for its weight

d.divisibility

_____ 3.

A requirement for a gold standard was that a. the price level be stable.

b.there be no paper money.

c.the paper money be convertible into gold.

d.gold coinage by 100% of money supply.

_____ 4.

The value of money depends primarily on a. the gold backing of the currency

b.the gold backing of both currency and deposits

c.its purchasing power

d.who issues it

_____ 5.

Demand deposits are

a.not usually considered as part of a country's money supply.

b.backed by gold but not convertible into it

c.categorized as belonging to M2 money supply.

d.categorized as belonging to M1 money supply.

_____ 6.

One way that time deposits differ from demand deposits is that

a.it is in practice always necessary to give advance warning before withdrawing money from the deposits.

b.time deposits are not considered very liquid assets.

c.demand deposits earn interest; time deposits do not.

d.time deposits usually cannot be drawn on by personal check (except for NOW accounts).

_____ 7.

A government bond could fill one function of money by acting as a. medium of exchange

b.store of wealth

c.unit of account

d.hedge against inflation

_____ 8.

The "narrow" definition of money, based only on its use as a medium of exchange, is a. currency

b.currency and demand deposits

c.currency and demand and time deposits

d.currency, demand deposits, and near money.

_____ 9.

The commercial banking system is distinct from investment banks and savings banks in that it

a.lends the savings to the public borrowers

b.pays interest on savings account

c.is subject to some government regulation

d.creates money

_____ 10.

A commercial bank is able to create money by a. printing it

b.creating a demand deposit as it extends a new loan.

c.maintaining reserves

d.issuing checks to its deposits.

_____ 11.

The process of creation of deposit money by commercial banks a. is possible because of the fractional reserve banks.

b.is consciously undertaken by each bank

c.always occur if there are excess reserves

d.permits only small, gradual changes in the supply of money.

_____ 12.

A bank that has insufficient reserves may

a.borrow from other banks or from Central Bank (CB).

b.stop making new loans

c.sell securities to other banks or to the public

d.all of the above

_____ 13.

Which of the following is not a tool that CB can use to alter money supply?

a.open market operations

b.changes in the discount rate

c.changes in the required reserve ratio

d.changes in tax rates

_____ 14.

Open market operations are

a.used by the CB regularly to meet seasonal, cyclical, and erratic fluctuations in the banks' need for reserves.

b.used only sparingly by the CB in order not to upset the government bond market.

c.conducted primarily in order to make a profit for the CB.

d.not very effective as a means of influencing the supply of money and credit.

_____ 15.

An increase in the required reserve ratio has the effect of a. reducing total reserves

b.reducing the multiple by which the money supply can expand.

c.increasing excess reserves

d.enabling the banks to reduce borrowings from the CB.

_____ 16.

The amount of money held for transactions balances will

a.vary in the same direction as income

b.vary in the same direction as interest rates

c.vary inversely with savings

d.be larger the shorter the interval between paydays

_____ 17.

Precautionary balances would be expected to increase if a. business conditions were to become less certain.

b.interest rate increased

c.people were expecting securities prices to rise

d.prices and incomes fell

_____ 18.

The speculative motive for desiring to hold money balances

a.means that more cash will be held if bond prices are expected to rise in the future.

b.means that more cash will be held if interest rates are expected to be lower in the future.

c.varies directly with income

d.is greater the lower the rate of interest.

_____ 19.

An excess supply of money balances causes

a.bond prices and interest rates to rise.

b.bond prices and interest rates to fall.

c.bond prices to fall and interest rates to rise

d.bond prices to rise and interest rates to fall

_____ 20.

If the CB wishes to pursue an expansionary monetary policy, it should

a.buy bonds on the open market, thus containing reserves of commercial banks and causing interest rates to rise.

b.sell bonds on the open market, thus expanding reserves of commercial banks and causing interest rates to fall.

c.buy bonds on the market, thus expanding commercial bank reserves and causing interest rates to fall.

d.sell bonds on the open market, thus contracting reserves of commercial banks and causing interest rates to rise.

_____ 21.

Suppose the CB believes that there is too much inflationary pressure in the economy. Its contradictory policy should include

a.the purchase of government bonds on the open market.

b.forcing the National Treasury to buy more government securities.

c.the sale of government bonds on the open market

d.a decrease in reserve requirements.

_____ 22.

One advantage of monetary policy over fiscal policy is that a. the decision lag is much shorter

b.its effects are easier to predict

c.its effects are felt uniformly throughout the economy

d.high interest rate do not hurt anybody, but high taxes do

_____ 23.

One way that monetary policy deliberately tries to influence the course of the economy

a.directly affecting income

b.making it harder (more costly) or easier (less costly) to borrow money.

c.changing the velocity of money

d.directly affecting the price level

_____ 24.

Generally recognized as a sign of a policy favoring tighter money is a a. reduction of the required reserve ratio

b.rise in government bond purchases by the CB

c.rise in the money supply

d.rise in the discount rate

_____ 25.

A tax takes the same amount from everyone, regardless of income is a. regressive

b.progressive

c.not fair at all

d.proportional to the benefit received