1.

MxP = V/Y FALSE

2. FED is focused on achieving:price stability, low unemployment, economic growth,
interest rate stability, financial market stability and exchange rate stability. TRUE
3. Liquidity is defined as ability of bank to pay all of its liabilities. FALSE
4. Velocity increases with a rise in the inflation rate, other things constant. TRUE
5. In the first days in evolution of money, because there was no need for exchange whole
system functioned on the principle of double coincidence of wants.FALSE
6. Today, dollar bills are both token money, and fiat money. TRUE
1. What of the following will cause money demand curve to shift leftwards:
a) Increase in interest rate
b) Decrease in interest rate
c) Decrease in price level
d) Increase in price level
e) Increase in GDP's level
f) Money demand curve cannot be shifted movements can happen only along the
curve
1.1.What of the following belongs to asset side of commercial bank's ballance sheet:
a) Deposit
b) Equity
c) Loans
d) answers a,b
e) answers b,c
f) answers a,b,c
1.2.Income is:
a) A stock of earnings per unit of time
b) Total collection of pieces of property that serve to store value
c) Anything that is generally accepted in payment for goods or services or in the
repayment of debts
d) Currency (paper money and coins)
e) Both a,b
f) None of the above
3. Which tool of monetary policy Fed can use to perform its role of lender of last resort:
a) Open market operations
b) Reserve requirements
c) Discount policy
d) Both a and b
e) Both b and c
f) None of the above
4. In their role of financial intermediaries ..... reduce transaction costs by:
a) Eliminating free rider problem
b) Eliminating spread between paid and.....
c) Reducing risk through diversification
d) Coping with assymetric information
e) Both c and d
f) Anwers a,b,c,d
5. What of the following FED used in recent years as a target for monetary policy:
a) M1

b)
c)
d)
e)
f)

M2
M2
M3
Federal funds rate
None of the above

6. If nominal GDP in 2012 was 14,3 million and money stock as measured by M1
was ............. and price level was 212 what was value of :
a) 22,88
b) 339,2
c) 8,93
d) 132,5
e) 1
f) None of the above
7. Choose the combination that shows the effects of expansionary monetary policy in the
short run (conducting open market purchases of US government securities that result in
increase in money supply):
c) M i I^ AD^ Y^
8. For a given money demand curve:
a) An increase in the money supply drives up interest rate
b) A decrease in the money supply drives downwards interest rate
c) An increase in the money supply drives downwards interest rate
d) An increase in the money supply will not affect interest rate
e) Both b and c
f) none of the above
9. What of the functions of money truly distinguishes money based systems from a barter
systems:
a) Medium of exchange
b) Store of value
c) Unit of account
d) both a,b
e) both a,c
f) answers a,b,c
10. What of the following are necessary conditions of trade to occur in a barter system: ?
a) Double coincidence of wants
b) Agreement of an exchaned rate
c) Type and value of money that will be used
d) Both a,b
e) Both a,c
f) answers a,b,c
11. What is the amount of the maximum deposit if the initial deposit is 30.000,00 and the
credit multiplier is 3:
a) 60.000,00
b) 90.000,00
c) 30.000,00
d) 9.999,99
e) 120.000,00
f) None of the above
12. What of the following is true:

a) In the short run monetary policy affect economy largely by influencing the interest
rate
b) In the long run monetary policy affect economy largely by influencing the interest
rate
c) In the long run changes in the money supply affect the price level
d) In the short run changes in the money supply affect the price level
e) Both a and c
f) Both b and d
12.1. M1 consists of:
a) Savings deposits
b) Currency held by nonbanking public
c) Checkable deposits
d) Currency held by banks
e) Both b,c
f) answers b,c,d
13. M2 consists of:
a) Savings deposits
b) Currency held by nonbanking public
c) Checkable deposits
d) Currency held by banks
e) Both b and c
f) Answers b, c, d
g) A, B I C
14. What of the following fulfill ALL properties of ideal money:
a) Diamonds
b) Gold
c) Cattle
d) Corn
e) Both a and b
f) None of the above