Suppose, Currency=100, Deposits=400, reqired reserves ratio = 0.1, excessive reserves = 60.

Money multiplier =

Deposit multiplier =

Creditmultiplier =

The critical difference of the Keynesian approach to the definition of money demand from the Neo-classical approach is that...

a.

Keynes believed that the precautionary demand for money is dependent on the speculative demand for money.

b.

Keynes differently interpreted transaction money demand.

c.

Keynes thought that money demand did not depend onthe yield on bonds and other assets.

d.

Keynes considered three motives of liquidity preferences, not one.

In the Keynesian approach, themoney market balance is achieved by...

a.

change in equilibrium real interest rate.

b.

balancing aggregate demand and aggregate supply on goods market.

c.

balancing savings and investments.

d.

change in equilibrium price level.

Monetary policy is the most effective, that is, it leads to the greatest growth in production when the economy under...

a.

liquidity trap.

b.

investment trap.

c.

high elasticity of investment to interest rate.

d.

high elasticity ofmoney demand tointerest rate.

The function of moneywhich involves its ability to accumulate wealth and revenue is called ...

a.

medium of exchange.

b.

the scale of prices.

c.

unit of account.

d.

store of value.

TheIS curve ...

a.

shows different combinations of investments and savings equilibrium.

b.

poses different combinations of real income and real interest rate, which lead to the balance of aggregated demand and aggregated supply.

c.

increases the slope with respect to the Yraxis when the state introduces an additional autonomous tax.

d.

shifts to the right under the influence of expansionary monetary policy.

e.

shifts to the right under the influence of expansionary fiscal policy.

What of the following statements about the crowding-out effect are correct?

a.

crowding-out effect may be eliminated by adequate increase in money supply.

b.

in the case of liquidity trap the crowding-out effect equals 100%.

c.

in the case of investment trap the crowding-out effect equals 100%.

d.

just stimulating fiscal policy causes the crowding-our effect, but it doesn't occur in expansionary monetary policy.

e.

in the case of full employment the crowding-out effect equals 100%.

f.

crowding-out effect implies that increase in government purchases suppresses private investment