1)
According to the quantity theory of money, price level changes are caused by changes in
a) GDP only b) interest rates only c) GDP and money supply d) money supply only
e) none of the above

2)
The yield on Treasury bonds has increased because the government wants to borrow more from the public. The demand for money will
a) fall in the Keynesian model only b) fall in the Friedman model only c) fall in both the Keynesian and Friedman models d) rise in the Keynesian model only e) none of the above

3)
Corporate stocks and bonds have gotten riskier and their returns have risen to reflect that greater risk. New banking regulation have made money safer so the interest rate on bank accounts has fallen to reflect the smaller risk. The demand for money will
a) rise in the Keynesian model only b) rise in the Friedman model only c) rise in both the Keynesian and Friedman models d) fall in the Keynesian model only e) none of the above

4)
Interest rates and returns on assets do not change but the economy goes into a recession anyway. The demand for money will
a) fall in the Keynesian model only b) fall in the Friedman model only c) fall in both the Keynesian and Friedman models d) rise in the Keynesian model only e) none of the above

5)
The line which shows the combinations of interest rates and output levels for which the money market is in equilibrium is called the
a) investment schedule b) IS curve c) money supply schedule d) LM curve e) all of the above

6)
If the economy is on the IS curve but below the LM curve, it means that
a) investment is insufficient b) the money supply is insufficient c) money demand is insufficient
d) the interest rate is too low e) none of the above

7)
When the demand for money rises,
a) the LM curve shifts to the left b) the IS curve shifts to the left c ) the LM curve shifts to the right
d) the IS curve shifts to the right e) none of the above

8)
When the money supply rises,
a) the LM curve shifts to the left b) the IS curve shifts to the left c ) the LM curve shifts to the right
d) the IS curve shifts to the right e) none of the above

9)
When the price level rises,
a) the LM curve shifts to the left b) the IS curve shifts to the left c ) the LM curve shifts to the right
d) the IS curve shifts to the right e) none of the above

10)
If debit cards become available for use in more stores, then
a) the LM curve will shift to the left b) the IS curve will shift to the left c ) the LM curve will shift to the right d) the IS curve will shift to the right e) none of the above

11)
If computer viruses compromise the integrity of electronic funds transfers, then
a) the LM curve shifts to the left b) the IS curve shifts to the left c ) the LM curve shifts to the right
d) the IS curve shifts to the right e) none of the above