Crowdly

According to the Quantity Theory of Money, if the money supply doubles and velocity is

constant (assuming real GDP is unchanged), the price level will double.

True

False

If the CPI increases from 100 to 150, the

inflation rate is:

150%

50%

10%

Financial Intermediaries reduce the exposure of investors to risk

through:

Moral

Hazard.

Transaction

cost.

Risk pooling.

Adverse

Selection.

Which of the following can be described as involving indirect

finance?

corporation buys a share of common stock issued by another corporation in the

primary market.

You make a deposit at a

bank.

Neither

of the above

You

make a loan to your neighbor.

Unexpected inflation redistributes wealth from:

Employees

to employers

✅

Consumers to producers

Borrowers to lenders

Lenders to borrowers

Rapid inflation in Brazil in the early 1990s

caused the cruzeiro to lose its ability to function as money. Which of the

following commodities would most likely have taken the place of the cruzeiro in

the Brazilian economy?

Impressionist paintings

Loaves of bread

Packs of

cigarettes

Car parts

Which of the following items is NOT considered

money?

A $20 bill

Coins in circulation

Balances in a savings account

A check

written to a friend

Unexpected deflation redistributes income from:

Borrowers

to lenders

Lenders to borrowers

Consumers to producers

Employers to employees

Which

of the following is NOT a function of money?

Unit

of account

Store

of value

Factor of production

Medium

of exchange