The demand for money will increase when either the price level or real GDP increases.

The demand for money will increase when either the price level or real GDP increases.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 2

In the early 1960s, monetary theory rather than Keynesian theory dominated economics.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 3

When a tax is imposed on a good for which the supply is relatively elastic and the demand is relatively inelastic,
 a. buyers of the good will incur most of the burden of the tax.
 b. sellers of the good will incur most of the burden of the tax.
 c. buyers and sellers will each incur 50 percent of the burden of the tax.
  d. the equilibrium quantity will increase.

Question 4

At a higher nominal interest rate, the demand for money decreases.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 5

Monetarists argue that government actions, particularly monetary policy, worsens the negative aspects of the business cycle.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 6

Sellers of a good will bear the larger part of the tax burden, and buyers will bear a smaller part of the tax burden, when the
 a. tax is placed on the sellers of the good.
 b. tax is placed on the buyers of the good.
 c. supply of the good is more elastic than the demand for the product.
  d. demand for the good is more elastic than the supply of the product.

Question 7

When choosing how much money they wish to hold in their financial portfolios, people trade off money's advantage of liquidity against the opportunity cost of holding money rather than other financial assets.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 8

According to the monetarists, government intervention can stabilize the economy and minimize the effect of business cycles.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 9

Buyers of a good will bear the larger part of the tax burden, and sellers will bear a smaller part of the tax burden, when the
 a. tax is placed on the sellers of the good.
 b. tax is placed on the buyers of the good.
 c. supply of the product is more elastic than the demand for the good.
  d. demand for the product is more elastic than the supply of the good.

Question 10

The supply and demand for money intersect at the equilibrium real interest rate, while the supply and demand curves for loanable funds intersect at the equilibrium real interest rate.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 11

Monetarists argue that the long-run Phillips curve is negatively sloped.
 a. True
  b. False
  Indicate whether the statement is true or false