sams macroeconomics exam 3
Jorge deposited $1,000 into an account three years ago. The first two years he earned 5% interest, the third year he earned 6% interest. How much money does Jorge have in his account today?
$1,168.65
Anna deposited $10,000 into an account 3 years ago. The first year she earned 12% interest, the second year she earned 8% interest, and the third year she earned 4% interest. How much money does she have in her account today?
$12,579.84
if the interest rate is 4.5 percent, what is the present value of a payment of $500 to be made one year from today?
$478.47
True or False: If the Fed decreases reserve requirements, the money supply will increase
True
True or False: The Bureau of Labor Statistics produces data on unemployment, types of employment, length of the average workweek, and the duration of unemployment
True
True or False: There is no easy way for policymakers to reduce the economy's natural rate of unemployment
True
Which of the following in not correct?
When unions raise wages above equilibrium, the quantity of labor supplied decreases, and the the quantity of labor demanded increases.
which of the following is a financial intermediary? a) the stock market b) a US government bond c) a mutual fund d) a wealthy individual who regularly buys and holds large quantities of government bonds
a mutual fund
Morgan, a financial advisor, has told her clients the following things. Which of her statements is not correct? a) "US government bonds generally pay a higher rate of interest than corporate bonds" b) "US government bonds have the lowest default risk" c) "if you purchase a municipal bond, you can sell it before it matures" d) "The interest received on corporate bonds is taxable"
a) "US government bonds generally pay a higher rate of interest than corporate bonds"
Assuming the interest rate is 6%, which of the following has the greatest present value: a) $285 today b) $150 paid in one year plus $140 paid in two years c) $100 paid today plus $100 paid in two years d) $300 paid in two years
a) $285 today
to increase the money supply, the fed could
decrease the discount rate
bank regulators impose capital requirements in order to
ensure banks can pay off depositors
true or false: in a closed economy, each unit of output is either consumed by households or invested
false
true or false: the natural rate of unemployment is constant over time
false
true or false: when a firm wants to borrow directly from the public to finance the purchase of new equipment, it does so by selling shares of stock
false
sandy has graduated from college and is devoting her time to searching for a job. she has seen plenty of openings but has not yet been offered one that best suits her tastes and skills. sandy is
frictionally unemployed. frictional unemployment exists even in the long run
the efficient markets hypothesis says that beating the market consistently is
impossible. Many studies find that beating the market is, at best, extremely difficult
the federal reserve was created
in 1913 by Congress
other things the same, an increase in wages above their equilibrium level
increases structural unemployment and increases the natural rate of unemployment
suppose banks decide to hold more excess reserves to deposits. other things the same, this action will cause the
money supply to fall. to reduce the impact of this the fed should lower the discount rate
If there is surplus of loanable funds, then
neither curve shifts, but the quantity of loanable funds supplied decreases and the quantity demanded increases as the interest rate falls to equilibrium
other things the same, bonds are likely to have higher interest rates if they have
no tax exemptions and long terms
a high price earnings ratio for a stock indicates that either the stock is
overvalued or people are relatively optimistic about the corporation's prospects
frictional unemployment is thought to explain relatively
short spells of unemployment, while structural unemployment is thought to explain relatively long spells of unemployment
in 2009, the US governments budget deficit increased substantially. Other things the same, this means the
supply of loanable funds shifted to the left
Reserve requirements are regulations concerning
the amount of reserves banks must hold against deposits
a problem that the fed faces when it attempts to control the money supply is that
the fed has to get the approval of the US Treasury Department whenever it uses any of its monetary policy tools
if there is a surplus of loanable funds, then
the quantity of loanable funds supplied is greater than the quantity of loanable funds demanded and the interest rate is above equilibrium
if there is a shortage of loanable funds, then
the quantity supplied is greater than the quantity demanded and the interest rate will rise
True or False: According to the theory of efficiency wages, firms operate more efficiently in wages are above the equilibrium level
true
true or false: if the interest rate is 8%, then the present value of $1,000 to be received in 4 years is $735.03
true
true or false: studies have shown that the design of the unemployment insurance system reduces the job search effort of the unemployed
true
true or false: when the soviet union began breaking up int he late 1980s, cigarettes began replacing the ruble as the medium of exchange even though the ruble was legal tender. The cigarettes provide an example of commodity money.
true
if the apple corporation sells a bond it is
borrowing directly from the public