Movements along a money demand curve reflect the effects of changes in the:

Movements along a money demand curve reflect the effects of changes in the:
 a. price level on the quantity of money demanded.
 b. interest rate on the demand for money.
 c. real exchange rate on the demand for money.
 d. interest rate on the quantity of money demanded.
 e. potential GDP on the quantity of money demanded.

QUESTION 2

The potential output of an economy is the level of output produced when the:
 a. real wage equals the nominal wage.
 b. price level is constant.
 c. expected real wage equals the nominal wage.
 d. seasonal unemployment rate is zero.
 e. expected price level equals the actual price level.

QUESTION 3

Other things constant, the quantity of money demanded varies:
 a. directly with the market interest rate.
 b. inversely with the market interest rate.
 c. inversely with the price level.
 d. directly with the price level.
 e. inversely with the unemployment rate.

QUESTION 4

If nominal wage rates increase by 2 percent per year and the price level increases by 5 percent per year, real wages will:
 a. increase by 3 percent per year.
  b. increase by 5 percent per year.
  c. increase by 2 percent per year.
  d. decrease by 5 percent per year.
  e. decrease by 3 percent per year.

QUESTION 5

Suppose an individual can earn 3 percent interest on an annual term deposit. His opportunity cost of holding 100,000 in cash instead of investing in the term deposit will be:
 a. 3,300.
 b. 330.
 c. 1,000.
 d. 6,000.
 e. 3,000.