A demand-side theory that focuses on the role of money to finance aggregate demand is termed__________?

Related Mcqs:

1. Investment is a unstable element of aggregate demand because it depends heavily on ?

   A. Government policy
   B. Expectations
   C. National income
   D. Historic trends

2. Aggregate demand is defined as_________________?

   A. one person’s demand for goods and services
   B. the lack of demand for goods and services
   C. the total demand in a society or on a world level for goods and services
   D. none of the above

3. The government can curb excessive aggregate demand(inflation)by_________________?

   A. decreasing taxes on consumers
   B. increasing spending
   C. decreasing taxes on firms
   D. none of the above

4. According to the quantity theory of money an increase in the money supply is most likely to lead to inflation if ?

   A. The velocity of circulation decrease
   B. The number of transaction decrease
   C. There is deflation
   D. The velocity of circulation and the number of transactions is constant

5. Friedman’s theory of consumption focuses on ?

   A. Past income
   B. Current income
   C. Disposable income
   D. permanent income

6. The precautionary demand for money is ?

   A. An idle because
   B. An active balance
   C. Directly related to interest rates
   D. Inversely related to income

7. The speculative demand for money occurs when ?

   A. Individuals hold money just in case an emergency happens
   B. Individuals hold money to buy things
   C. Individuals hold money rather than other assets because they are worried about the price of the other assets falling
   D. Individuals hold money to shop

8. The liquidity trap occurs when the demand for money ?

   A. Is perfectly interest elastic
   B. Is perfectly interest inelastic
   C. Means that an increase in money supply leads to a fall in the interest rate
   D. Means that an increases in the money supply leads to an increases in the interest rate

9. An outward shift in the demand for money other things being equals should lead to ?

   A. A lower interest rate but the same quantity of money
   B. A higher interest rate but the same quantity of money
   C. A higher quantity of money but lower interest rates
   D. A higher quantity of money but the same interest rate

10. Assume there is no government or foreign setor, If the MPC is 75 a Rs20 million decrease in planned investment will cause aggregate output to decrease by ?

    A. Rs80 million
    B. Rs20 million
    C. Rs 15 million
    D. Rs26.67 million