Q1. The GDP implicit price deflators take into account price changes, as well as some changes in the quality of various products.
Q2. In dollars, the nominal GDP in the United States is in 2005 was between:
a. 8 and 10 billion
b. 11 and 13 billion
c. 8 and 10 trillion
d. 11 and 13 trillion
Q3. The difference between the cost of raw materials and the price of the final good is known as
a. value added
b. capital consumption allowance
c. a transfer payment
d. net national product
Q4. National income accountants eliminate double counting of intermediate goods by using only the value of final goods.
Q5. The GDP excludes the production of services for which no monetary transaction takes place.
Q6. The GDP does not include
a. final goods
c. intermediate goods
Q7. The unregulated portion of the economy involving goods and services that are produced and exchanged without monetary transactions is known as
a. the underground economy
b. the secret economy
c. the capital consumption
d. transfer payments
Q8. Most national wealth in the United States is held in the private sector.
Q9. The GDP is the current market value of final goods and services produced by the nation's economy over a period of time.
Q10. If a lawn service mows your grass, it is included in the GDP.
Q11. Gross national product measures the current market value of final output produced within a country by both domestic and foreign resources.
Q12. The expenditures included in GDP are usually less than the income component of GDP.
Q13. A government surplus may trigger a decline in the money supply.
Q14. Money is defined as
a. the currency of a nation
b. anything that is commonly accepted in exchange for other goods and services
c. currency that has been designated as legal tender
d. notes issued by the U.S. Treasury and backed by gold
Q15. The multiple expansion of the money supply is made possible because money withdrawn from one bank finds its way into other banks.
Q16. Double coincidence of wants is associated with a barter economy.
Q17. The Producer Price Index (PPI) measures
a. the price level of aggregate output
b. the prices charged by manufacturers
c. changes in the prices received by producers
d. price changes passed along to consumers
Q18. The transactions approach to the equation of exchange can be expressed as MV = PQ.
Q19. The bulk of the M1 money supply is made up of
a. silver dollars and gold bars
b. checkable deposits
c. travelers checks
d. money market funds
Q20. The ease with which an asset can be converted into the medium of exchange is called
c. the equation of exchange
d. the money multiplier
Q21. In the monetary equation of exchange, MV = PQ, P stands for
a. total price
b. average price
d. the Producer Price Index
Q22. If you want to deflate the current price of something to eliminate the effect of inflation,
a. divide the number by the price index
b. multiply the number by the price index
c. multiply the number by 2 and then divide by the price index
d. multiply the number by the price index and then divide by 2
Q23. The higher the reserve requirements, the
a. greater the possible expansion of the money supply
b. less the possible expansion of the money supply
c. more loans a bank can extend
d. higher the interest a bank must pay on its checkable deposits
Q24. If banks had $10 million in legal reserves, $105 million in checkable deposits, and a 10 percent reserve requirement, they would have to reduce their checkable deposits or increase their reserves.
Q25. The largest 80 banks in the United States control about
a. 25% of all banking assets
b. 50% of all banking assets
c. 70% of all banking assets
d. 90% of all banking assets
Q26. If a Federal Reserve Bank wanted to tighten the money supply, it would
a. lower the reserve requirement
b. buy securities in the open market
c. raise the discount rate
d. lower the discount rate
Q27. Decisions on the Fed's buying and selling of government securities to control the U.S. money supply are made by
a. the Federal Open Market Committee
b. Federal Reserve Banks
c. the Board of Governors
d. the president of the New York Federal Reserve Bank
Q28. Permanent members of the Federal Open Market Committee include
a. all members of the Board of Governors
b. the president of the New York Federal Reserve Bank
c. the secretary of the U.S. Treasury
d. both (a) and (b)
Q29. The usual term of office of members of the Board of Governors is
a. 2 years
b. 5 years
c. 7 years
d. 14 years
Q30. Which of the following is not a correct statement?
a. the United States has 12 Federal Reserve districts
b. less than one-half of U.S. private banks are members of the Federal Reserve System
c. the members of the Board of Governors of the Fed are appointed by the U.S. President for 14-year terms
d. the U.S. Senate must approve any major change in Fed policy
Q31. If depositors withdraw their funds and create a shortage of reserves, bankers
a. have no alternative but to call in outstanding loans
b. can borrow reserves from the Fed
c. must close their operations until their reserves increase
d. must sell bank stock to replenish reserves
Q32. The Depository Institutions Deregulation and Monetary Control Act of 1980 did not
a. require all commercial banks to join the Federal Reserve System
b. expand the use of Fed services to nonmember banks
c. increase FDIC and FSLIC insurance coverage
d. expand the availability of checking accounts
Q33. Assume a reserve requirement of 10 percent. A commercial bank has total reserves of $100,000, excess reserves of $25,000, and total checkable deposits outstanding of $750,000) If the reserve requirement were increased to 15 percent,
a. total expansion of the money supply would be limited to $750,000
b. excess reserves would be decreased to $12,500
c. the bank would have no alternative but to decrease its checkable deposits
d. the bank would be $12,500 short of required reserves
Q34. The discount rate at all Federal Reserve Banks is always identical.
Q35. The official term of office of the chairman of the Fed is
a. 2 years
b. 4 years
c. 7 years
d. 14 years
Q36. In terms of the dollar value of payment, which of the following comprises the largest share?
b. personal checks
c. debit cards
d. credit cards
Q37. When the Fed conducts open-market operations, it primarily uses
a. Treasury bills
b. long-term U.S. government bonds
c. bonds of publicly traded corporations
d. overnight loans of major banks
Q38. Aggregate demand curves tend to be very flat.
Q39. If planned investment increases by $20 billion, other things remaining the same, planned saving eventually will increase by $20 billion, regardless of the size of the multiplier.
Q40. In the simplest Keynesian model, planned investment is assumed to be
a. positively related to income
b. negatively related to income
Q41. The value of the marginal propensity to consume
a. can exceed 1
b. is always between 0 and 1
c. can be less than 0
d. is always greater than 1
Q42. According to classical economists, the aggregate supply curve is
a. vertical in both the long run and the short run
b. vertical only in the long run
c. vertical only in the short run
d. horizontal in the short run
Q43. The classical economists held that the rate of interest would equate planned investment and planned saving, so that all saving would eventually be invested.
Q44. Which of the following emphasizes government spending as a countercyclical approach to create economic expansion?
a. Keynesian economics
b. supply-side economics
c. classical economics
d. Say's Law
Q45. One major difference between Keynesian analysis and classical theory is that the classical theory assumes
a. a market economy
b. an agricultural economy
c. full employment as a norm
d. a constant money supply
Q46. Assume a marginal propensity to consume of three-fourths. If private planned investment decreases by $10 billion and government spending increases by $13 billion, the national income will increase by
a. $4 billion
b. $12 billion
c. $3 billion
d. $2.25 billion
Q47. The monetarist school is more similar to the Keynesian school than the classical school.
Q48. Various estimates of the multiplier for the U.S. economy place it between 2 and 3, depending on the level of employment.
Q49. In the multiplier formula, 1/MPS equals the multiplier.
Q50. "Supply creates its own demand" is an expression of
a. the quantity theory of money
c. Say's Law
d. the Keynesian critique of classical economics
|Due By (Pacific Time)||07/21/2015 12:00 am|
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