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    F.6 Econ Past Papers MCs ch9

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    F.6 Econ Past Papers MCs ch9

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    F.6 Econ past papers MCs ch9

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    F.6 Econ Past Papers MCs ch9

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    bellokennis

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    of 10

    Past Paper Questions/ Ch.9: Money Demand and Money Market Equilibrium/p.

    Chapter 9: Money demand and money market equilibrium


    AL questions
    1992-05
    The total demand for money curve, other things being equal, will shift to the left as a result of
    (1) an increase in the interest rate.
    (2) an increase in the thrift of households.
    (3) a decrease on the risk of holding bonds.
    (4) a decrease in the stock of liquid assets.

    A. (1), (2) and (3) only


    B. (1), (2) and (4) only
    C. (1), (3) and (4) only
    D. (2), (3) and (4) only

    1995-13
    Which of the following statements about money are correct?
    (1) Inflation cannot sustain without increases in the money supply.
    (2) Anything that has an intrinsic value can serve as money.
    (3) The use of money solves the problem of double coincidence of wants.

    A. (1) and (2) only


    B. (1) and (3) only
    C. (2) and (3) only
    D. (1), (2) and (3)
    1995-14

    Refer to the above diagram. Which of the following correctly explains the shift of the total demand for money
    curve from M0 to M1?
    A. a fall in the interest rate
    B. a rise in national income
    C. expectations of a rise in bond price
    D. a purchase of bonds by the government in the open market (95-14)
    Past Paper Questions/ Ch.9: Money Demand and Money Market Equilibrium/p.2

    1995-15
    If people expect a rise in the market rate of interest, they will hold _____ money for speculative purposes as bond
    prices will _____ and they will tend to buy _____ bonds.
    A. more … rise … more
    B. more … fall … less
    C. less … rise … more
    D. less … fall … less

    1997-06
    Which of the following will increase the demand for money?
    (1) Credit cards are more commonly used.
    (2) There is an increase in income.
    (3) There is a fall in the interest rate.
    (4) The bond price prices fall.

    A. (1) and (2) only


    B. (1) and (3) only
    C. (2) and (3) only
    D. (1), (2) and (3)

    1998-15
    Which of the following will cause a leftward shift of the asset demand for money?
    A. an increase in the money supply.
    B. widespread use of Octopus.
    C. an increase in the marginal efficiency of investment.
    D. None of the above.

    2000-15
    Which of the following concerning the value of bond is correct ?

    A. The closer to maturity the bond is, the greater will be the change in its value for a change in interest rate.
    B. The further from maturity the bond is, the greater will be the change in its value for a change in interest rate.
    C. A change in interest rate will not affect the value of a bond.
    D. The impact of a change in interest rate on the value of the bond does not depend on its maturity date.
    Past Paper Questions/ Ch.9: Money Demand and Money Market Equilibrium/p.3

    2001-22

    2002-14
    If there is a decrease in the liquidity preference of an economy, the equilibrium interest rate will _____ and the
    velocity of circulation of money will _____.

    A. increase ... remain unchanged


    B. decrease ... decrease
    C. increase ... decrease
    D. decrease ... increase

    2002-24
    Past Paper Questions/ Ch.9: Money Demand and Money Market Equilibrium/p.4

    2003-14
    The demand for money depends on the _____ interest rate while decisions on saving and investment depend on the
    _____ interest rate.
    A. real ... real
    B. real ... nominal
    C. nominal ... real
    D. nominal ... nominal

    2004-17
    Inclusive of the principal, the real interest rate is the relative price between ______ and ______.

    A. goods today … goods tomorrow


    B. goods today … money tomorrow
    C. money today … goods tomorrow
    D. money today … money tomorrow

    2004-18
    Suppose individuals can only choose to hold bonds or cash. The cost of holding cash is

    A. the real interest rate because the return from holding bonds will not be affected by a change in the price level.
    B. the real interest rate because it reflects the rate of return from investment.
    C. the nominal interest rate because it is the return from bonds.
    D. the nominal interest rate only when inflation rate can be accurately anticipated.

    2004-22
    Money is superior to other financial assets because it is

    A. more liquid.
    B. widely accepted as a medium of exchange.
    C. generally more stable in value.
    D. All of the above.

    2005-15
    Which of the following can explain the rightward shift of the total demand for money curve?
    A. more extensive use of credit cards.
    B. an increase in the velocity of circulation of money.
    C. a fall in interest rates.
    D. higher risk of holding bonds.
    Past Paper Questions/ Ch.9: Money Demand and Money Market Equilibrium/p.5

    2007-12
    In the case of money being an interest-bearing asset, money demand is a function of
    A. the nominal but not real interest differential between bond and money because it is the nominal return that
    constitutes cost.
    B. the real but not nominal interest differential between bond and money between because it is the real return that
    matters.
    C. the nominal or real interest differential between bond and money because the two differentials are the same.
    D. neither the nominal nor real interest differential between bond and money because the two differentials are
    irrelevant to the cost of holding money.

    2008-20

    2008-21

    2009-15
    Past Paper Questions/ Ch.9: Money Demand and Money Market Equilibrium/p.6

    2009-16

    2010-16

    2010-19

    HKDSE questions
    SP-28

    PP-35
    Past Paper Questions/ Ch.9: Money Demand and Money Market Equilibrium/p.7

    12-30

    13-27

    15-28
    Past Paper Questions/ Ch.9: Money Demand and Money Market Equilibrium/p.8

    2016-29

    17-32
    Past Paper Questions/ Ch.9: Money Demand and Money Market Equilibrium/p.9

    18-29
    Past Paper Questions/ Ch.9: Money Demand and Money Market Equilibrium/p.10

    Ch. 9: Money Demand and Money Market Equilibrium


    Past Paper Questions
    Suggested Solutions

    Money Demand
    1992-05 D 1995-13 B 1995-14 B

    1995-15 B 1997-06 C 1998-15 D

    2000-15 B 2001-22 C 2002-24 A

    2002-14 D 2003-14 C 2004-17 A

    2004-18 C 2004-22 D 2005-15 D(68)

    2007-12 C(21) 2008-20 D(56) 2008-21 A(66)


    2009-15 B(65) 2009-16 C(29) 2010-16 A(75)
    2010-19 B(73) SP-28 B PP-35 A
    2012-30 A(51) 2013-27 B(67) 2015-28 A(55)
    2016-29 A(41) 2017-32 A(61) 2018-29 C(65)

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