THE MACRO ECONOMY
EXAM/TODAY CHAPTER
15; SCHILLER; 15E
2024/2025
The price of money is equal to the: - CORRECT ANSWER - opportunity cost of money
- interest rate
interest rate - CORRECT ANSWER the price paid for the use of money.
money supply (M1) - CORRECT ANSWER currency held by the public, plus balances in
transactions accounts.
money supply (M2) - CORRECT ANSWER M1 plus balances in most savings accounts
and money market mutual funds.
demand for money - CORRECT ANSWER the quantities fo money people are willing
and able to hold at alternative interest rates, ceteris paribus.
portfolio decision - CORRECT ANSWER the choice of how (where) to hold idle funds.
transactions demand for money - CORRECT ANSWER money held for the purpose of
making everyday market purchases.
precautionary demand for money - CORRECT ANSWER money held for unexpected
market transactions or for emergencies.
speculative demand for money - CORRECT ANSWER money held for speculative
purposes, for later financial opportunities.
equilibrium rate of interest - CORRECT ANSWER the interest at which the quantity of
money demanded in a given time period equals the quantity of money supplied.
federal funds rate - CORRECT ANSWER the interest rate for interbank reserve loans.
aggregate demand - CORRECT ANSWER the total quantity of output demanded at
alternative price levels in a given time period, ceteris paribus.
EXAM/TODAY CHAPTER
15; SCHILLER; 15E
2024/2025
The price of money is equal to the: - CORRECT ANSWER - opportunity cost of money
- interest rate
interest rate - CORRECT ANSWER the price paid for the use of money.
money supply (M1) - CORRECT ANSWER currency held by the public, plus balances in
transactions accounts.
money supply (M2) - CORRECT ANSWER M1 plus balances in most savings accounts
and money market mutual funds.
demand for money - CORRECT ANSWER the quantities fo money people are willing
and able to hold at alternative interest rates, ceteris paribus.
portfolio decision - CORRECT ANSWER the choice of how (where) to hold idle funds.
transactions demand for money - CORRECT ANSWER money held for the purpose of
making everyday market purchases.
precautionary demand for money - CORRECT ANSWER money held for unexpected
market transactions or for emergencies.
speculative demand for money - CORRECT ANSWER money held for speculative
purposes, for later financial opportunities.
equilibrium rate of interest - CORRECT ANSWER the interest at which the quantity of
money demanded in a given time period equals the quantity of money supplied.
federal funds rate - CORRECT ANSWER the interest rate for interbank reserve loans.
aggregate demand - CORRECT ANSWER the total quantity of output demanded at
alternative price levels in a given time period, ceteris paribus.
