Money Supply & Money Demand

Which of the following are the functions of money? Multi-select options.

• As a medium of exchange

• As a store of wealth

• As a means of valuating different types of goods and services

• As a mean of establishing future claims and payments

Macroprudential regulation focuses not on a single financial institution but on the financial system as whole, and which monitors its impact on the wider economy. Is this statement true or false?

• True

• False

Too low a liquidity ratio mean that the bank would not be able to meet its customers' demand for cash. To high a liquidity ratio means that the bank is not making as much profit as it could. Are these Two statements true or false? select two options.

• The first statement is false

• The first statement is true

• The second statement is false

• The second statement is true

What would be the effect on the demand for money curve (L) of a rise in the bond prices?

• L would shift to the left

• There would not be an effect

• L would shift to the right

• There would be a movement down along L

The amount of banknotes issued by the Bank of England depends largely on the demand for notes from the general public. Is this statement true or false?

• True

• False

It is common to distinguish three motives for holding money: the transactions motive, the precautionary motive, and the speculative motive. The principal determinant of the size of transaction balances is:

• Tastes

• National Income

• Interest rates

The process by which banks increase the money supply is known as money creation. The amount by which the money supply can increase depends on their liquidity ratio. If the bank decides to hold a lower liquidity ratiom the bank multiplier will ____________________.

• increase

• reduce

• stay the same

Cam won £1,000 at a bingo game. He deposits his £1000 winnings into a building society account, so that he can use the money next year to pay his daughter free courses. This is an example of money seving as:

• a store of value

• a medium of exchange

• a unit of account

• an investment good

Consumption of domestically produced goods and services plus injections (Cd + J) is known as:

• aggregate supply

• aggregate income

• national expenditure

• total consumption

A repo is where a bank sell some assets (e.g. bonds) and agrees to buy them back at a particular price after a set period of time. Is this statement true or false?

• True

• Flase