Q1. Which of the following statements about the demand for and supply of money is least accurate?

A)  As gross domestic product rises, the demand for money balances also rises.

B)  As inflation rises, the demand for money by households and businesses also rises.

C)  As the interest rate rises, the supply of money also rises.

Q2. If the money interest rate is measured on the y-axis and the quantity of money is measured on the x-axis, the money supply curve is:

A)  downward sloping to the lower right.

B)  vertical.

C)  upward sloping to the upper right.

Q3. The supply of money is primarily determined by:

A)  the monetary authorities.

B)  interest rates.

C)  inflation.

Q4. Which of the following statements about the demand and supply of money is most accurate? People who are:

A)  holding money when interest rates are lower will try to increase their money balances and, as a result, the supply of money increases.

B)  buying bonds to reduce their money balances will increase the demand for bonds with an associated increase in interest rates.

C)  holding money when interest rates are higher will try to reduce their money balances and, as a result, the demand for money decreases.

Q5. Which of the following statements about the relationship between interest rates and the demand for and supply of money is most accurate? Interest rates affect:

A)  the demand for money only.

B)  the supply of money only.

C)  both the demand for and supply of money.

答案和详解如下：

Q1. Which of the following statements about the demand for and supply of money is least accurate?

A)  As gross domestic product rises, the demand for money balances also rises.

B)  As inflation rises, the demand for money by households and businesses also rises.

C)  As the interest rate rises, the supply of money also rises.

Correct answer is C)

The supply of money is determined by the monetary authorities and is not affected by changes in interest rates. Thus, the supply of money curve is vertical.

Q2. If the money interest rate is measured on the y-axis and the quantity of money is measured on the x-axis, the money supply curve is:

A)  downward sloping to the lower right.

B)  vertical.

C)  upward sloping to the upper right.

Correct answer is B)

The money supply schedule is vertical because it is not affected by changes in the interest rate but is determined by the monetary authorities such as the Federal Reserve System (Fed) in the United States.

Q3. The supply of money is primarily determined by:

A)  the monetary authorities.

B)  interest rates.

C)  inflation.

Correct answer is A)

The monetary authorities determine the quantity of money available to the economy. Inflation and interest rates affect the demand for money balances.

Q4. Which of the following statements about the demand and supply of money is most accurate? People who are:

A)  holding money when interest rates are lower will try to increase their money balances and, as a result, the supply of money increases.

B)  buying bonds to reduce their money balances will increase the demand for bonds with an associated increase in interest rates.

C)  holding money when interest rates are higher will try to reduce their money balances and, as a result, the demand for money decreases.

Correct answer is C)

Buying bonds would drive bond prices up and interest rates down. Selling bonds would have the opposite effect; driving bond prices down and interest rates up. When interest rates are lower, there is an excess demand for money. The supply of money is determined by the monetary authorities.

Q5. Which of the following statements about the relationship between interest rates and the demand for and supply of money is most accurate? Interest rates affect:

A)  the demand for money only.

B)  the supply of money only.

C)  both the demand for and supply of money.

Correct answer is A)

Interest rates only affect the demand for money. With higher interest rates, the opportunity cost of holding money increases, and people hold less money and more interest-earning assets. Monetary authorities determine the supply of money. Therefore, the supply of money is independent of the interest rate.

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