econ module 11 (in order)

How many economic downturns occurred in the United States from 1855 to 2020?

33

Why do consumers reduce their buying after an economic downturn has started? (choose all that apply)

Because they fear they may lose their jobs. Because prices of goods have already fallen, and they fear a further fall.

What committee is responsible for conducting monetary policy?

Federal Open Market Committee

What is the central error at the root of the idea that saving is bad for the economy?

Forgetting that the money being saved on consumer goods is being spent on capital goods.

The supervising body of the Federal Reserve that is responsible for providing general guidance to the Fed and supervising the regional banks is called the Board of ________.

Governors

According to Hazlitt, which of the following are effects of keeping interest rates artificially low? (choose all that apply)

It decreases the supply of real capital. It encourages highly speculative ventures. It increases the demand for capital.

According to Hazlitt, which of the following would happen if money that had previously been used for saving was instead used to buy consumer goods?

It would decrease the price of consumer goods.

Which of the following would happen if the Federal Reserve raised the reserve requirement? (choose all that apply)

It would lead to higher interest rates. It would reduce the amount of money banks could lead.

Which of the following would happen if the Federal Reserve raised the reserve requirement? (choose all that apply)

It would reduce the amount of money banks could lead. It would lead to higher interest rates.

Classical economists like Adam Smith believed the economy was self-correcting in the long run. Which economist argued that waiting for the economy to self-correct was foolish, saying, "In the long run we're all dead," and instead recommended strong action by the government to jump-start the economy?

John Maynard Keynes

An extremely long and severe economic contraction is called a(n) _________.

depression

Which of the following are examples of supply-side policies the government can use to encourage economic growth and lower unemployment? (choose all that apply)

deregulation job training programs

Hazlitt writes that "savings" can be defined as the available supply of new capital, and "investment" can be defined as the demand for new capital. Just like supply and demand determines the price for anything else, supply and demand determines the price that savers are paid for loaning out their money. What does Hazlitt say is "the special name for the price of [this] loaned capital"?

interest rate

What government economic strategy reduces taxes on businesses who invest in increasing their productivity?

investment tax credits

Which of the following are services provided by the Federal Reserve? (choose all that apply)

processing checks and electronic payments supplying banks with paper money and coins protecting consumers through regulation and education

The lowest level of the business cycle is known as the _________.

trough

How many regional Federal Reserve banks are there?

12

According to Hazlitt, which of the following are true about hoarding? (choose all that apply)

Dishoarding, as people die and their hoards are discovered by others, likely offsets new hoarding. Irrational hoarding of cash is harmful in most economic situations.

According to Hazlitt, which of the following are true about new capital? (choose all that apply)

Even if a greater quantity of goods isn't needed, new capital can create goods of improved quality Producers invest in new capital goods because they reduce the costs of production. There is essentially no limit to the amount of new capital that can be absorbed.

One of the American government's ongoing economic policies is assisting research through grants and programs. Which of the following agencies is an example of such programs?

National Institutes of Health

Hazlitt argues that saving is not a cause of depressions but is instead a(n) __________ of depressions.

consequence

The period of the business cycle where growth slows down and unemployment increases is called the ____________ phase.

contractionary

Government policies designed to create economic growth by increasing aggregate demand are called ________________.

demand-side policies

The reserve requirement is the percentage of _________ that banks must hold in reserve.

deposits

The rate of interest that the central bank charges on its loans is called the ____________.

discount rate

Nearly all market economies experience long-term growth because of ___________.

economic incentives

One of the Federal Reserve's responsibilities is regulating financial institutions. Which of the following are the purposes of the Federal Reserve's oversight and regulation? (choose all that apply)

ensuring compliance with applicable laws and regulations fostering stability in financial markets promoting the safety and soundness of the banking system

The period of the business cycle where economic growth increases and unemployment decreases is called the _____________ phase.

expansionary

What factors affect the different phases of the business cycle? (choose all that apply)

fiscal policy monetary policy consumer-producer confidence technological change

What is usually a downside of lowering taxes and increasing government spending?

increased government borrowing

Which of the following are examples of monetary policy strategies the government can use to encourage economic growth and lower unemployment? (choose all that apply)

increasing the money supply lowering interest rates

The Federal Reserve's goals of helping America achieve stable prices, economic growth, and full employment are referred to as the Fed's ____________.

mandate

The management of a nation's money supply and interest rates is called __________ policy.

monetary

The top of the business cycle is known as the __________.

peak

A long economic contraction, defined by some economists as a contraction lasting more than six months, is called a(n) ____________.

recession

According to Hazlitt, saving is merely a different form of ___________.

spending

Government policies designed to create economic growth by increasing productivity and efficiency are called ____________.

supply-side policies