B252 Final Exam Formulas questions
with complete solutions
Quantity theory of money: - correct answer ✔✔MV=PQ
M is money supply
V is velocity of money
P is price level
Q is quantity of goods and services
What does M x V represent? - correct answer ✔✔The average number of times each dollar
spent on goods and services
If Velocity is constant in the 'quantity theory of money,' then... - correct answer ✔✔Growth
Rate of M = Growth Rate of P + Growth Rate of Q
Money multiplier= - correct answer ✔✔1/reserve ratio
Maximum possible Changes in the money supply:
For a deposit or for a change in the reserve ratio = - correct answer ✔✔Money Multiplier *
Change in excess reserves
Maximum possible Changes in the money supplier:
For a bond purchase = - correct answer ✔✔Money Multiplier * Value of a bond
with complete solutions
Quantity theory of money: - correct answer ✔✔MV=PQ
M is money supply
V is velocity of money
P is price level
Q is quantity of goods and services
What does M x V represent? - correct answer ✔✔The average number of times each dollar
spent on goods and services
If Velocity is constant in the 'quantity theory of money,' then... - correct answer ✔✔Growth
Rate of M = Growth Rate of P + Growth Rate of Q
Money multiplier= - correct answer ✔✔1/reserve ratio
Maximum possible Changes in the money supply:
For a deposit or for a change in the reserve ratio = - correct answer ✔✔Money Multiplier *
Change in excess reserves
Maximum possible Changes in the money supplier:
For a bond purchase = - correct answer ✔✔Money Multiplier * Value of a bond
