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The CPI is an indicator of: A The total sum of final goods and services produced in the nation in a given year B The fluctuation of goods and utilities that make up GNP C The average cost of specific goods and services D The average cost of private utilities and consumer goods over a 3-month period

C The average cost of specific goods and services

A decline in real GDP, which could lead to a recession or depression, is called: A Expansion B Peak C Trough D Contraction

C. Trough

Deflation would likely begin to occur in which phase of the economic cycle? A Expansion B Contraction C Trough D Peak

Contraction

How is GNP different from GDP? A Both measure the value of all goods and services produced in 1 year, but GNP also includes the value of imports B GNP is calculated by subtracting the rate of inflation from GDP C Both measure the value of all goods and services produced in one year, but GNP not only includes U.S. based production, but also includes the value of production by foreign operations of U.S. citizen owned operations D Both measure the value of all goods and services produced in 1 year, but GDP not only includes U.S. based production, but also includes the value of production by U.S. owned overseas operations

D Both measure the value of all goods and services produced in 1 year, but GDP not only includes U.S. based production, but also includes the value of production by U.S. owned overseas operations

What measures the value of all finished goods and services produced by a country's citizens, regardless of where they reside? A GDP B PPI C Real GDP D GNP

D. GNP

Which of the following is false regarding economic policy? A Fiscal policy is controlled by the president and Congress B Monetary policy is controlled by the Federal Reserve Board C Fiscal policy deals with government spending D Monetary policy includes changes to taxation

D. Monetary policy includes charges to taxation

All of the following are lagging economic indicators, except: A Average prime rate B Reported corporate profits C Average duration of employment D The money supply

D. The money supply

This is a financial statement that shows the revenues incoming and expenses flowing out: A Cash flow statement B Balance sheet C Statement of changes to retained earnings D Income statement

D. income statement

Which indicator provides data showing the current economic situation? A Coincident B Leading C Predictive D Lagging

A. Coincident

Monetary policy is implemented using all the following methods, except: A Establishing tax rates B Setting reserve requirements C Open market operations D Moral suasion

A. Establishing tax rates

The cost of borrowing money for a corporation is measured by the: A Prime rate B GDP C CPI D Fed rate

A. Prime rate

Which of the following is true regarding economic policy? A The Fed will ease the money supply during a recession B The Fed can raise the reserve to ease the money supply C The Fed can increase the discount rate to stimulate the economy D The Fed can engage in reverse repos to combat inflation

A. The fed will ease the money supply during a recession

Which of the following is false regarding monetary policy? A Monetary policy allows the Fed to change the discount rate to stimulate the economy B Monetary policy allows changes in the level of government spending to control economic growth C Monetary policy is dependent on the Federal Reserve Board's ability to carry out policy decisions D Monetary policy changes the level of the money supply to control economic activity

B Monetary policy allows changes in the level of government spending to control economic growth

All the following relate to fiscal policy, except: A Size of the deficit B Money supply C Government spending D Tax rates

B. Money Supply

The fiscal policy viewpoint is that the: A The economy and the business cycle can be controlled by the money supply B The federal government can manipulate the economy to any desired level by purchasing or selling treasury securities C The federal government can manipulate the economy to any desired level by changing its tax rates and spending practices D The federal government can manipulate the economy by controlling the money supply

C The federal government can manipulate the economy to any desired level by changing its tax rates and spending practices