Economics Readings Site By Colin Ong

This blog has been created to provide an area for economics students to read about how economics impacts daily life. It is especially useful for students to understand the application of macroeconomics as communicated through the media and governmental websites.

This online resource has been set up for educational purposes.All rights are reserved by the various websites.

For further clarification, please email colin@mrmc.com.sg

MCQ 1 (a,b)

clipped from www.bized.co.uk

Money: Demand for money




Q1. Which of the following events will lead to an increase in the demand for money?


(Select one answer)





(a) * An increase in the level of aggregate output

(b) * A decrease in the price level

(c) * An increase in the interest rate

(d) * An increase in the supply of money









Source: Pearson logo




Q2. Which one of the following statements about the demand for money is incorrect?


(Select one answer)





(a) * the amount of money that people hold is negatively related with the interest rate

(b) * as the level of national income rises, the amount of money balances that individuals hold decreases

(c) * both the level of national income and the interest rate affect the demand for money balances

(d) * other things constant, an increase in the real interest rate reduces the demand for real money balances
 blog it