which of the following is a reason why bitcoin is not included in the bank of canada's measures of the money supply? a)btc are bot appropriately divisible b)limited nuöber of btc mean inflation will not undermine value c) only very small portüon of transactions are in btc d)btc is not accepted as payment in canada e)recent collapses of btc exchanges have reduced the banks confidence in btc
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- 7. a) only the central bank can create money b) commercial banks can create credit c) all UK currency is backed by central bank holdings of gold 8. An increase in the money supply can lead to a) a rise in interest rates b) a fall in the liquidity ratio c) a fall in interest rates 9. The neutrality of money refers to the idea that a) a change in money supply has no impact on output over any time period b) a change in money supply has no short run impact on output c) the real quantity of money is constant in the long termOne limitation of using money as a store of value is that: a) money needs to be divisible and portable b) money loses value over time due to inflation c) money is not readily acceptable everywhere in return for goods and services d) money is not very liquidThe speculative demand for money suggests that: (a) Individuals hold onto money for the purpose of engaging in transactions (b) As the rate of interest rate increases, the demand for money will rise (c) When the economy becomes more uncertain, people are more likely to hold unto money (d) The velocity of money is constant (e) As the rate of interest falls, the demand for money will rise.
- Money velocity in the country of Ecoland is always stable. In 2019 (the base year), the money supply was $250 billion. In 2020, the money supply increased to $350 billion, the price level increased by 25 percent, and nominal GDP equaled $1400 billion. By how much did real GDP increase between 2019 and 2020? A) $15 billion B) $ 50 billion C) $12.5 billion D) $150 billionWhich of the following will cause the demand curve for money to shift to the right? (a) An increase in real Gross Domestic Product (GDP).(b) A decrease in the repo rate.(c) An increase in the quantity of money available.(d) A decrease in the quantity of money available.15 ) Monetary Approach with a constant velocity Money supply growth has steady been 2% higher in Japan than in the US and output growth has steady been 2% lower in Japan than in the US. ThenO1 a) (E_S/Yen) has been rising by 4%02 b) (E_S/Yen) has been falling by 4%03 c) (E_S/Yen) has been invariant 04 d) real interest rate has been higher in JapanO5 e) two of (a)-(d)
- 28) When the Fed raises the federal funds rate A) the value of the dollar rises on the foreign exchange market. B) consumption increases. C) net exports increase. D) the value of the dollar falls on the foreign exchange market. 29) An inflation rate targeting rule A) reduces uncertainty about monetary policy. B) means that the inflation rate must exceed 5 percent in order for the rule to be effective. C) has been adopted the by the Fed in response to the financial crisis of 2008-2009. D) will not work if the Fed continues to sue open market operations.Explain the role of reverse repo rate in controlling the money supply in economyProve the derivation process that %delta of Money Supply (M) is equal to %delta Price (P) with assuming velocity of money (V) and total transactions (T) are constant.
- The U.S. Federal Reserve responded to the 2020 COVID-19 lockdowns by implementing an expansionary monetary policy, causing the M2 money supply to rise from$15.3trillion in December 2019 to$18.3 trillion in July 2020. Over the same period, real GDP fell by 5.1 percent. (a) Assuming that the velocity of money was constant over this period, what should the inflation rate be, based on the quantity equation? Show your work. (b) Why would you not expect inflation to be immediate, following the Fed’s monetary expansion?If a society chooses fiat money as its money form, it __________.Group of answer choices A. will need to make sure the currency is convertible into gold B. must make sure there is an illiquid money supply C. should estimate any central bank D. must be particularly vigilant about controlling the quantity of moneyWhat of the following are functions of money? Olegal tender for transactions O facilitate sales, purchases, and exchange O receipt for ownership of a specific resource (gold) a gauge of value for all resources a conduit of regulation and policy