11) A decrease in the price level in the economy leads toA) a leftward shift in the demand for money curve.B) a rightward shift in the demand for money curve.C) a leftward movement along the demand for money curve.D) a rightward movement along the demand for money curve. 12) An increase in the level of real GDP in the economy leads toA) a leftward shift in the demand for money curve.B) a rightward shift in the demand for money curve.C) a leftward movement along the demand for money curve.D) a rightward movement along the demand for money curve. 13) A decrease in the level of real GDP in the economy leads toA) a leftward shift in the demand for money curve.B) a rightward shift in the demand for money curve.C) a leftward movement along the demand for money curve.D) a rightward movement along the demand for money curve. 14) Which of the following factors does NOT shift the demand curve for money?A) changes in the interest rateB) changes in the price level in the economyC) changes in real incomeD) changes in real GDP 15) The demand for money that arises so that individuals or firms can make purchases on quick notice is called theA) real demand for money.B) transaction demand for money.C) liquidity demand for money.D) speculative demand for money. 16) The demand for money that arises because holding money over short periods is less risky than holding stocks or bonds is called theA) transactions demand for money.B) liquidity demand for money.C) opportunity cost demand for money.D) speculative demand for money. 17) If your wealth is held as currency or in checking accounts or other assets that you can convert to money on short notice your assets are considered to beA) abundant.B) fast moving.C) interest bearing.D) liquid. 18) What is the motivation for individuals to hold money?A) to reduce riskB) to have liquidityC) to facilitate transactionsD) all of the above Recall the Application about the Fed’s expanded involvement in the economy following the financial crisis in 2008 to answer the following question(s). 19) Recall the Application. Prior to the financial crisis in 2008 the Fed’s traditional method of conducting monetary policy to expand the money supply wasA) purchasing Treasury securities.B) purchasing mortgage-backed securities.C) lowering reserve requirements.D) raising the discount rate. 20) Recall the Application. During 2008 the value of the Fed’s total assetsA) fell by over $2 trillion.B) remained virtually unchanged.C) became negative. D) more than doubled.
