ECON 3080 - MT1 Clicker Questions

What does real GDP measure? A) The market value of all goods sold in a given time period B) The total income of everyone in the economy in a given time period C) The value of all goods sold in a given time period adjusted for price changes D) The total income of everyone in the economy in a given time period adjusted for price changes

D) The total income of everyone in the economy in a given time period adjusted for price changes

The use of borrowed funds to make investments is called: A) hedging B) the balance sheet C) fractional-reserved banking D) leveraging

D) leveraging

The prices of capital goods are: A) not included in the GDP deflator but are included in the CPI. B) included in neither the GDP deflator nor the CPI. C) included in both the GDP deflator and the CPI. D) not included in the CPI but are included in the GDP deflator.

D) not included in the CPI but are included in the GDP deflator.

An example of "fiat" money is: A) beaver pelts B) gold coins C) cigarettes D) paper bills

D) paper bills

The Fed sees that commercial banks hold adequate reserves by: A) posting a bank examiner in each commercial bank's accounting office. B) setting an appropriate required reserve ratio. C) conducting appropriate open-market operations. D) paying the banks interest on their reserves.

D) paying the banks interest on their reserves.

The Fed's strategy of buying long-term, riskier assets in response to the Great Recession is known as: A) open-market operations B) leveraging C) the money multiplier D) quantitative easing.

D) quantitative easing.

The neoclassical theory of distribution suggests that factor demand is based on: A) monopsony power. B) the rule, "from each according to his abilities, to each according to his needs." C) the capital-labor ratio. D) the marginal productivity of that factor.

D) the marginal productivity of that factor.

Which best describes changes in US GDP over time? (Pt.1) A) Real GDP rises over time, but its growth is not steady. B) Real GDP is constant; only nominal GDP changes. C) Real GDP grows at a consistent rate over time. D) Real GDP falls in about as many years as it rises.

A) Real GDP rises over time, but its growth is not steady.

How do economists define "investment"? A) The purchase of newly created goods and services to add to the capital stock B) The purchase of shares in a publicly traded corporation C) The purchase of interest-bearing assets such as bonds D) The purchase of existing productive assets in the capital stock

A) The purchase of newly created goods and services to add to the capital stock

Which statement is TRUE? A) The system of fractional-reserve banking creates money but not wealth. B) The system of fractional-reserve banking creates both money and wealth. C) The Fed determines commercial banks' excess reserves. D) With fractional-reserve banking, each round of loan and deposit creates a growing addition to the money supply.

A) The system of fractional-reserve banking creates money but not wealth.

The inflation rate measures how fast: A) prices are rising B) the money supply is growing C) the economy is growing D) personal income is growing

A) prices are rising

The neoclassical theory of distribution combined with the Cobb-Douglas production function suggest a linkage between: A) productivity growth and real wages. B) productivity growth and nominal output growth. C) capital and labor productivity. D) population growth and real output growth.

A) productivity growth and real wages.

What enables money creation in addition to that directly created by the central bank? A) The Federal Reserve B) Open-market operations C) Off-shore banking D) Fractional-reserve banking

D) Fractional-reserve banking

The GDP Deflator enables economists to make adjustment changes in: A) Quantity B) Output C) Population D) Prices

D) Prices

The National Income Identity is expressed as: A) Output -Income. B) S=1 C) NX = Exports - Imports D) Y=C+I+G+NX

D) Y=C+I+G+NX

Which is an example of the Cobb-Douglas production function? A) AKª L ^1-a B) AKª + L ^1-a C) AKª L ^1+a D) A(Kª)/L ^1-a

A) AKª L ^1-a

If the currency-deposit ratio is 0.7 and the reserve-deposit ratio is 0.2, what is the money multiplier? A) 0.53 B) 0.90 C) 1.89 D) 3.50

C) 1.89

What is the most important measure of overall economic performance? (pt.1) A) Net national income B) Net exports C) Gross domestic product D) The unemployment rate

C) Gross domestic product

What does the annual percentage change in the GDP deflator tell us? A) The unemployment rate B) The change in real GDP C) The inflation rate D) The change in nominal GDP

C) The inflation rate

A bank's total assets relative to the bank owners' equity is the: A) required reserve ratio B) monetary base C) leverage ratio D) capital requirement.

C) leverage ratio

Technological advances typically have a ________ impact on investment. A) negative B) negligible C) volatile D) positive

C) volatile

Which equation describes the marginal product of a factor (MPi)? A) (PMP) - W B) W/P C) F(j, i + 1) - F( j, i) D) Y = F(j, i)

F(j, i + 1) - F( j, i)

Ruritania has a labor force of 50million people. Currently 48.2 million are employed. What is the Ruritarian unemployment rate? A) 96.4% B) 3.6% C) 3.7% D) 1.8%

B) 3.6%

Suppose that each factor of production increases by 10 percent and output subsequently increases by 10 percent. Which phrase describes this situation? A) Cobb-Douglas production function B) Constant returns to scale C) Unit elasticity D) Constant opportunity costs

B) Constant returns to scale

Which is NOT a role money plays in the economy? A) Store of value B) Factor of production C) Unit of account D) Medium of exchange

B) Factor of production

Which best describes the path in US Inflation over time? (Pt.2) A) Inflation has been steadily growing in recent decades. B) Inflation in recent decades has been less volatile. C) In recent decades, deflation has occurred about as often as inflation. D) The Fed has been able to eliminate inflation.

B) Inflation in recent decades has been less volatile.

Which is NOT a variable determining the supply of money? A) The monetary base B) The marginal propensity to save C) The reserve-deposit ratio D) The currency-deposit ratio

B) The marginal propensity to save

How to economists define "Gross National Product"? A) Total expenditure on an economy's output of final goods and services B) Total expenditure on an economy's output of final goods and services plus net foreign earning C) =GDP - Depreciation D) Disposable personal income plus income taxes and nontax payments

B) Total expenditure on an economy's output of final goods and services plus net foreign earning

When comparing economic performance in different years, economists: A) adjust for changes in output. B) adjust for changes in prices. C) adjust for changes in both output and prices. D) do not have to make any adjustments.

B) adjust for changes in prices.