Econ Final exam (2)

Refer to table 29-5. The bank of Kopcka's reserve ratio is

10 percent

Suppose banks desire to hold no excess reserves. If the reserve requirement is 15 percent and if a bank receives a new deposit of $10, then this bank

C. Will be able to make new loans up to a maximum of $8.50

Refer to table 29-4. If the bank faces a reserve requirement of 10 percent, then the bank

C. has excess reserves of $10,000.

When a union raises the wage above the equilibrium level, it

C. Raise the quantity of labor supplied and reduces the quantity of labor demanded, resulting in unemployment.

Commodity money is

C. Money with intrinsic value

The classical dichotomy and monetary neutrality are represented graphically by

A vertical long-run aggregate-supply curve

Refer to figure 28-1. At the equilibrium wage, how many workers are unemployed?

A. 0

Suppose banks desire to hold no excess reserves. If the reserve requirement is 10 percent and if a bank receives a new deposit of $10, then this bank

A. Must increase its required reserves by $1

Which of the following is not included in either M1 or M2

A. U.S treasury bills

The measure of the money stock called M1 includes

A. Wealth held by people in their checking accounts

Which list ranks assets from most to least liquid

B. Currency, stocks, fine art

Money

B. Is the most liquid asset

Money is the most liquid asset available because

B. It is a medium of exchange

An economy's natural rate of unemployment is

B. The amount of unemployment that the economy normally experiences

Refer to Figure 28-1. At the equilibrium wage, how many workers are employed?

C. 5000

Union contribute to

C. Both structural unemployment and the natural rate of unemployment

Which of the following is not a cause of frictional unemployment

C. Minimum wage laws

If 2002 is the base year, then the inflation rate in 2005 equals

D. (CPI in 2005 - CPI in 2004/ CPI in 2004) x 100

Frictional unemployment can be the consequence of

D. All of above

Unions

D. Lower the wages of non-unionized workers

Economists use the term money to refer to

D. Those types of wealth that are regularly accepted by sellers in exchange for goods and service.

Fiat money

Has no intrinsic value

Credit cards are

Important for analyzing the monetary system

Other things the same, if the price level falls, people

Increase foreign bond purchases, so the supply of dollars in the market for foreign-currency exchange increases

The position of the long-run aggregate supply curve

Is determined by the things that determine output in the classical model

The consumer price index is used to

Monitor changes in the cost of living over time

Consider five individuals with different occupations. Which of the following parts of individuals has a double coincidence of wants?

Polly and Paul

Other things the same, when the price level rises, interest rates

Rise, so firms decrease investment

The inflation rate you are likely to hear on the nightly news is calculated from

The CPI

When the Fed buys government bonds

The money supply increases and the federal fund rate decrease

Which of the following is not a determinant of the long run level real GDP?

The price level

In computing the consumer price index, a base year is chosen. Which of the following statements about the base year is correct?

The value of the consumer price index is always 100 in the base year

The long-run aggregate supply curve shifts left if

There is a natural disaster

Cyclical unemployment refers to

Year to year fluctuations of unemplouyment around its natural rate

Which of the following is included in the aggregate demand for goods and services

consumption demand, investment demand, net export ( all of above are correct)

The long-run aggregate supply curve shifts right if

immigration from abroad increases, the capital stock increases, technology advances ( all of above)

The long-run aggregate supply curve shows that by itself a permanent change in aggregate demand would lead to a long-run change

in the price level, but not output

The long-run aggregate supply curve would shift right if immigration from abroad

increase or Congress abolished the minimum wage

The long-run aggregate supply curve

is vertical, is a graphical representation of the classical dichotomy, indicates monetary neutrality in the long run ( all of above )

In calculating the CPI, a fixed basket of goods and services is used. The quantities of the goods and services in the fixed basket are determined by

surveying consumers