Ivy Software MBA Prepworks Fundamentals of
Economics (2026) EXAM || MOST RECENT EXAM
2026-2027 ACTUAL COMPLETE REAL EXAM
QUESTIONS AND CORRECT ANSWERS
(VERIFIED ANSWERS) ALREADY GRADED A+ |
GUARANTEED SUCCESS!! NEWEST EXAM |
JUST RELEASED!!
If the price level increases, the value of money decreases (T/F)
- ANSWER True. the price level and the value of money are
directly related. As the overall level of prices increases, the
value of a unit of money decreases. For example: if a bottle of
soda increases in price from 5 cents to $1.25 over 80 years, it is
likely that the satisfaction level has stayed the same and the
money used to purchase the soda has decreased in value
because of an increase in the price level.
Supposed the price level equals 5 (P=5). The value of one unit
of money is -
ANSWER -1/5 or .2.
1/P
The value of one unit of money is calculated by - ANSWER -
dividing 1 by the
,price level
(1/P)
Suppose the price level equals 5 (P=5). Now suppose the
Federal Reserve Bank conducts open market operations and
auctions off government bonds. Assume nothing else in the
economy changes. Because of the sale of bonds, the price
level will _________ increase decrease
not change - ANSWER -decrease
Suppose the price level equals 5 (P=5). Now suppose the
Federal Reserve Bank conducts open market operations and
auctions off government bonds. Assume nothing else in the
economy changes. Because of the sale of bonds, the value of
one unit of money will __________ increase decrease not
change - ANSWER -increase. When the Fed auctions off
government bonds, currency is taken out of circulation and
the money supply is decreased. A decrease in the money
supply is graphically demonstrated by shifting the money
supply curve to the left.
Suppose the price level equals 5 (P=5). Now suppose the
Federal Reserve Bank conducts open market operations
and purchases government bonds. Assume nothing else in
the economy changes. Because of the purchase of bonds,
the price level will __________ increase decrease
not change - ANSWER -increase
,Suppose the price level equals 5 (P=5). Now suppose the
Federal Reserve Bank conducts open market operations
and purchases government bonds. Assume nothing else in
the economy changes. Because of the purchase of bonds,
the value of one unit of money will __________ increase
decrease
not change - ANSWER -decrease. when the Fed purchases
government bonds,
the money supply increases, an increase in the money
supply is graphically
demonstrated by shifting the money supply
curve to the right.
SUppose the price level equals 8 (P=8) Now suppose the Fed
decreases the required reserve deposit ratio, ceteris paribus. In
the money market, this monetary policy change will cause the
money ________ (supply/demand) curve to shift ________ (left,
right, north-east, south-west) - ANSWER -supply, southwest.
When the Federal Reserve Bank decreases the required reserve
deposit ratio, currency is taken out of bank reserves and placed
into circulation. As a result, the money supply is increased. An
increase of money supply is graphically demonstrated by
shifting the money supply curve to the right.
SUppose the price level equals 8 (P=8) Now suppose the Fed
decreases the required reserve deposit ratio, ceteris paribus.
Because of the change to the required reserve deposit ratio, the
price level will_______ (increase, decrease, not change) -
ANSWER -increase. WHen the Fed decreases the required
, reserve deposit ratio, currency is taken OUT of bank reserves
and placed into circulation. As a result the money supply is
increased. An increase of money supply is graphically
demonstrated by shifting the money supply curve to the right.
An increase in the money supply causes the price level to
increase
SUppose the price level equals 8 (P=8) Now suppose the Fed
decreases the required reserve deposit ratio, ceteris paribus.
Because of the change to the required reserve deposit ratio, the
value of one unit of money will _______ (increase, decrease,
not change) - ANSWER -decrease. An increase in the money
supply causes the price level to increase and the value of each
unit of money to decrease.
Suppose the price level equals 9 (P=9). Now suppose the Fed
increases the discount rate, ceteris paribus. In the money
market, this monetary policy change will cause the money
________ (supply/demand) curve to shift _______ (L/R/NE/SW) -
ANSWER -supply/left. When the Fed increases the discount
rate, the money supply is decreased. A decrease of money
supply is graphically demonstrated by shifting the money
supply curve to the left.
Suppose the price level equals 9 (P=9). Now suppose the Fed
increases the
discount rate, ceteris paribus. Because of the increase in the
discount rate, the
Economics (2026) EXAM || MOST RECENT EXAM
2026-2027 ACTUAL COMPLETE REAL EXAM
QUESTIONS AND CORRECT ANSWERS
(VERIFIED ANSWERS) ALREADY GRADED A+ |
GUARANTEED SUCCESS!! NEWEST EXAM |
JUST RELEASED!!
If the price level increases, the value of money decreases (T/F)
- ANSWER True. the price level and the value of money are
directly related. As the overall level of prices increases, the
value of a unit of money decreases. For example: if a bottle of
soda increases in price from 5 cents to $1.25 over 80 years, it is
likely that the satisfaction level has stayed the same and the
money used to purchase the soda has decreased in value
because of an increase in the price level.
Supposed the price level equals 5 (P=5). The value of one unit
of money is -
ANSWER -1/5 or .2.
1/P
The value of one unit of money is calculated by - ANSWER -
dividing 1 by the
,price level
(1/P)
Suppose the price level equals 5 (P=5). Now suppose the
Federal Reserve Bank conducts open market operations and
auctions off government bonds. Assume nothing else in the
economy changes. Because of the sale of bonds, the price
level will _________ increase decrease
not change - ANSWER -decrease
Suppose the price level equals 5 (P=5). Now suppose the
Federal Reserve Bank conducts open market operations and
auctions off government bonds. Assume nothing else in the
economy changes. Because of the sale of bonds, the value of
one unit of money will __________ increase decrease not
change - ANSWER -increase. When the Fed auctions off
government bonds, currency is taken out of circulation and
the money supply is decreased. A decrease in the money
supply is graphically demonstrated by shifting the money
supply curve to the left.
Suppose the price level equals 5 (P=5). Now suppose the
Federal Reserve Bank conducts open market operations
and purchases government bonds. Assume nothing else in
the economy changes. Because of the purchase of bonds,
the price level will __________ increase decrease
not change - ANSWER -increase
,Suppose the price level equals 5 (P=5). Now suppose the
Federal Reserve Bank conducts open market operations
and purchases government bonds. Assume nothing else in
the economy changes. Because of the purchase of bonds,
the value of one unit of money will __________ increase
decrease
not change - ANSWER -decrease. when the Fed purchases
government bonds,
the money supply increases, an increase in the money
supply is graphically
demonstrated by shifting the money supply
curve to the right.
SUppose the price level equals 8 (P=8) Now suppose the Fed
decreases the required reserve deposit ratio, ceteris paribus. In
the money market, this monetary policy change will cause the
money ________ (supply/demand) curve to shift ________ (left,
right, north-east, south-west) - ANSWER -supply, southwest.
When the Federal Reserve Bank decreases the required reserve
deposit ratio, currency is taken out of bank reserves and placed
into circulation. As a result, the money supply is increased. An
increase of money supply is graphically demonstrated by
shifting the money supply curve to the right.
SUppose the price level equals 8 (P=8) Now suppose the Fed
decreases the required reserve deposit ratio, ceteris paribus.
Because of the change to the required reserve deposit ratio, the
price level will_______ (increase, decrease, not change) -
ANSWER -increase. WHen the Fed decreases the required
, reserve deposit ratio, currency is taken OUT of bank reserves
and placed into circulation. As a result the money supply is
increased. An increase of money supply is graphically
demonstrated by shifting the money supply curve to the right.
An increase in the money supply causes the price level to
increase
SUppose the price level equals 8 (P=8) Now suppose the Fed
decreases the required reserve deposit ratio, ceteris paribus.
Because of the change to the required reserve deposit ratio, the
value of one unit of money will _______ (increase, decrease,
not change) - ANSWER -decrease. An increase in the money
supply causes the price level to increase and the value of each
unit of money to decrease.
Suppose the price level equals 9 (P=9). Now suppose the Fed
increases the discount rate, ceteris paribus. In the money
market, this monetary policy change will cause the money
________ (supply/demand) curve to shift _______ (L/R/NE/SW) -
ANSWER -supply/left. When the Fed increases the discount
rate, the money supply is decreased. A decrease of money
supply is graphically demonstrated by shifting the money
supply curve to the left.
Suppose the price level equals 9 (P=9). Now suppose the Fed
increases the
discount rate, ceteris paribus. Because of the increase in the
discount rate, the
