Multiple Choice Questions

The real rate of interest is
  • the money rate of interest adjusted for inflation.
  • the price of one currency in terms of another currency.
  • money rate of interest minus the expected inflation rate.
  • the interest rate in the loanable funds market.
The exchange rate is
  • the money rate of interest adjusted for inflation.
  • the price of one currency in terms of another currency.
  • money rate of interest minus the expected inflation rate.
  • the interest rate in the loanable funds market.
The price of one country's currency in terms of another's is called
  • resource market.
  • the interest rate in the loanable funds market.
  • the exchange rate.
  • the money rate of interest adjusted for inflation.
In the AD/AS model, the aggregate demand for goods and services is composed of the purchases made by
  • money rate of interest minus the expected inflation rate.
  • real interest rate = money interest rate − inflationary premium
  • individuals have sufficient time to modify their behavior in response to price changes.
  • consumers, investors, governments, and foreigners (net exports).
Which of the following equations is accurate?
  • the interest rate in the loanable funds market.
  • real interest rate = money interest rate − inflationary premium
  • Businesses buy resources from households, and households use their income to buy goods and services from businesses.
  • money rate of interest minus the expected inflation rate.
The aggregate demand curve indicates the relationship between
  • the general price level and the aggregate quantity of goods and services demanded.
  • the deliberate control of the money supply to achieve macroeconomic goals.
  • the general level of prices and the quantity of goods and services that domestic firms will supply.
  • the interest rate in the loanable funds market.
The short-run aggregate supply curve shows the relationship between
  • market that coordinates the borrowing and lending of individuals and firms.
  • the general price level and the aggregate quantity of goods and services demanded.
  • the general level of prices and the quantity of goods and services that domestic firms will supply.
  • the deliberate control of the money supply to achieve macroeconomic goals.
The actions of borrowers and lenders are coordinated by
  • the exchange rate.
  • real interest rate = money interest rate − inflationary premium
  • the interest rate in the loanable funds market.
  • the money rate of interest adjusted for inflation.
The market that coordinates the exchange of productive inputs between the household and business sectors is the
  • the exchange rate.
  • resource market.
  • consumers, investors, governments, and foreigners (net exports).
  • long-run aggregate supply curve.
The real rate of interest equals the
  • the price of one currency in terms of another currency.
  • money rate of interest minus the expected inflation rate.
  • the money rate of interest adjusted for inflation.
  • real interest rate = money interest rate − inflationary premium
0 h : 0 m : 1 s

Multiple Choice Questions
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