Maco Exam /HW 11

An example of full-bodied money is:

gold coins

The FED set Z at 10% and TR = $1,000,000, what are required reserves equal too?

$100,000

The FED sets Z at 20% and TR = $200,000 what would the excess reserves equal:

$160,000

Use the following Market Research for the next 37 - 40 questionsQD = 3000 - 500P and QS = 400 + 800P37. What is the market equilibrium price?

$2.00

The FED sets Z at 20% and TR = $200,000 what would the required reserves equal:

$40,000

The FED sets Z at 20% and TR = $200,000 what would the growth in MS equal:

$800,000

The FED set Z at 10% and TR = $1,000,000, what would the total growth of MS equal:

$9,000,000

The FED set Z at 10% and TR = $1,000,000, what are the banks' excess reserves equal too?

$900,000

The FED set Z at 10% and TR = $1,000,000, what does the money multiplier equal?

10

What is the equilibrium quantity?

2000 units

The FED sets Z at 20% and TR = $200,000 what would the money multiplier equal:

5

The MPC = .9, which of the following changes in AD eliminates a $100 million recessionary gap:

A $10 million increase in Investment spending.

Using fiscal policy, if the MPC = .8, which of the following changes in AD alleviates an inflationary gap of $100 billion.

A $20 billion decrease in Governmental spending.

An example of fiat money is:

anything the national government deems

In the apple pie market, which of the following is correct if the price of ice cream increased by 10%? Apple pies and ice cream are compliments

Demand would decrease

In the apple pie market, what happens if consumer income increases and apple pies are a normal product?

Demand would increase

In the apple pie market, what happens if consumer's have an increasing price expectation concerning apple pies.

Demand would increase

In the apple pie market, what happens if more people are buying apple pies.

Demand would increase

In the apple pie market, what happens if the government announces that apple pies lower the chances of cancer?

Demand would increase

In the apple pie market, what happens if the price of chocolate chip cookies increases? Apple pies and chocolate chip cookies are substitutes

Demand would increase

If a recession started, the FED should:

buy governmental securities

In general, if the macroeconomy experiences recession the federal government should:

Increase the aggregate demand.

Which country invented the modern banking system?

Italy

Who is the current FED chair?

Jerome Powell

In the apple pie market, what happens if a shortage of apple pies exists because market price is too low?

Neither Demand nor Supply will shift

In the apple pie market, what happens if a surplus of apple pies exists because market price is too high?

Neither Demand nor Supply will shift

A balanced budget occurs when:

None of the above

In the apple pie market, what happens if a big fire in Southeastern Michigan destroys thousands of apple trees?

Supply would decrease

In the apple pie market, what happens if the government places a production tax on apples?

Supply would decrease

In the apple pie market, what happens if the production of apple pies causes a negative externality?

Supply would decrease

In the apple pie market, what happens if the government subsidizes apple pie production?

Supply would increase

In the apple pie market, which of the following is correct if the state of Washington planted acres and acres of apple groves, which are now starting to produce apples for the first time.

Supply would increase

The major function of M1 money is:

a medium of exchange

Using a "real" or inflation devalued dollar to purchase illustrates money's function as:

a store of value

If inflation started, the FED should:

increase the discount rate

The most frequently used tool of monetary control is:

open market operations

Which of the following does the FED control?

open market operations

Buying or selling of bonds the FED is:

open-market operations

Which of the following financial assets is considered to be the most liquid?

savings accounts in banks

When the FED lowers the discount rate:

some banks will lower their interest rates

What is correct at a price of $3.50?

two of the above are correct

What is correct at a price of 50 cents?

two of the above are correct

If Iberia produces 1000 shoes and 200 socks and Sri Lanka produces 200 shoes and 1000 socks, would a trade of 500 shoes and 500 socks be acceptable to both countries?

yes, because Sir Lanka would gain 300 shoes and Iberia would gain 300 socks

The tax deferred attribute of your IRA represents:

you retirement account being non-taxable, until withdrawal