Refer to the given market-for-money diagrams. The total demand for money is show

Question

Refer to the given market-for-money diagrams. The total demand for money is shown by:

A. D1. B. D2. C. D3. D. S.

7)Answer the question on the basis of the following information. For transactions, households and businesses want to hold an amount of money equal to one-half of nominal GDP. The table shows the amounts of money they want to hold as an asset at various interest rates.

Refer to the given information. If nominal GDP is $200 and the interest rate is 6 percent, the total amount of money that households and businesses will want to hold is:
A. $120.
B. $140.
C. $160.
D. $180.

8. A commercial bank can add to its actual reserves by:
A. lending money to bank customers.
B. buying government securities from the public.
C. buying government securities from a Federal Reserve Bank.
D. borrowing from a Federal Reserve Bank.

9. Projecting that it might temporarily fall short of legally required reserves in the coming days, the Bank of Beano decides to borrow money from its regional Federal Reserve Bank. The interest rate on the loan is called the:
A. prime rate.
B. federal funds rate.
C. Treasury bill rate.
D. discount rate.

10. Upon which of the following industries is a restrictive monetary policy likely to be most effective?
A. Furniture.
B. Clothing.
C. Food processing.
D. Residential construction.

610 10 D, 3e10 8 8 8 4 0 100 200 Amount of Money Demanded (SB) 100 200 300 400 100 200 300 400 500600 Amount of Money Amount of Money Demanded (SB) Demanded ($B)

Explanation / Answer

6 C. D3

7 B. $140

8   D. borrowing from a Federal Reserve Bank.

9   D. discount rate.

10. D. Residential construction.

If you don't understand anything then comment, I'ill revert back on the same. :)

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