Economics of Money, Banking and Financial Markets 12th edition by Frederic Mishkin Test bank
6) Evidence from business cycle fluctuations in the United States indicates that
A) a negative relationship between money growth and general economic activity exists.
B) recessions are usually preceded by declines in bond prices.
C) recessions are usually preceded by dollar depreciation.
D) recessions are usually preceded by a decline in the growth rate of money.
Answer: D
Ques Status: Previous Edition
AACSB: Reflective Thinking
7) ________ theory relates the quantity of money and monetary policy to changes in aggregate economic activity and inflation.
A) Monetary
B) Fiscal
C) Financial
D) Systemic
Answer: A
Ques Status: Previous Edition
AACSB: Application of Knowledge
8) A continuing increase in the growth of the money supply is likely followed by
A) a recession.
B) a depression.
C) an increase in the price level.
D) no change in the economy.
Answer: C
Ques Status: Previous Edition
AACSB: Reflective Thinking
9) It is true that inflation is a
A) continuous increase in the money supply.
B) continuous fall in prices.
C) decline in interest rates.
D) continually rising price level.
Answer: D
Ques Status: Previous Edition
AACSB: Application of Knowledge
10) Which of the following is a TRUE statement?
A) Money or the money supply is defined as Federal Reserve notes.
B) The average price of goods and services in an economy is called the aggregate price level.
C) The inflation rate is measured as the rate of change in the federal government budget deficit.
D) The aggregate price level is measured as the rate of change in the inflation rate.
Answer: B
Ques Status: Previous Edition
AACSB: Application of Knowledge
11) If the prices would have been much higher ten years ago for the items the average consumer purchased last month, then one can likely conclude that
A) the aggregate price level has declined during this ten-year period.
B) the average inflation rate for this ten-year period has been positive.
C) the average rate of money growth for this ten-year period has been positive.
D) the aggregate price level has risen during this ten-year period.
Answer: A
Ques Status: Previous Edition
AACSB: Analytical Thinking
12) From 1950-2017 the price level in the United States increased more than
A) twofold.
B) threefold.
C) sixfold.
D) tenfold.
Answer: C
Ques Status: Revised
AACSB: Reflective Thinking
13) Complete Milton Friedman's famous statement, "Inflation is always and everywhere a ________ phenomenon."
A) recessionary
B) discretionary
C) repressionary
D) monetary
Answer: D
Ques Status: Previous Edition
AACSB: Application of Knowledge
14) There is a ________ association between inflation and the growth rate of money ________.
A) positive; demand
B) positive; supply
C) negative; demand
D) negative; supply
Answer: B
Ques Status: Previous Edition
AACSB: Application of Knowledge
15) Evidence from the United States and other foreign countries indicates that