macro chapter 13+14

"crowding in" refers to federal government deficits... a. used for public infrastructure, which will offset any decline in business investment b. which reduce private business and consumption spending c. which reduce future rates of economic growth d. all of the above are correct

a

during 1998-2001, federal government budget deficits... a. were completely removed b. dropped significantly from a high of $300 billion c. remained fairly stable at about $150 million per year d. exceeded $200 billion each year

a

the national debt is unlikely to cause national bankruptcy because the... a. national debt can be refinanced by issuing new bonds b. interest on the public debt equals GDP c. national debt cannot be shifted to future generations for repayment d. federal government cannot repudiate the outstanding national debt

a

the portion of the u.s. national debt held by foreigners... a. represents a burden because it transfers purchasing power from u.s. taxpayers to other countries b. is an accounting entry that represents no real burden c. decreased as a portion of the total debt during the 2000s d. has been constant for many decades

a

what establishes the value of fiat money? a. our collective trust and confidence that the central government, which decrees that money cannot be refused as payment for debt b. gold and silver owned by the large commercial banks c. the central government authority's promise to redeem fiat money for gold or silver upon demand d. none of the answers above are correct

a

when measured as a percentage of GDP, the u.s. national debt reached its highest levels as a result of... a. world war II b. the vietnam war c. the reagan defense buildup and tax cuts d. the obama economic recovery program

a

which of the following defines the "unit of account" function of money? a. a common measurement of the relative value of different goods and services b. the ability of money to hold value over time c. the materials used to manufacture money are of medium grade so that people will not hoard money for its commodity value d. money that is widely accepted in exchange for goods and services

a

which of the following is not part of the federal reserve system? a. council of economic advisors b. board of governors c. federal open markets committee d. 12 federal reserve district banks e. federal advisory council

a

if the national debt rises to the debt ceiling and there is currently a budget _____, the congress and the president must agree to _____ the debt ceiling or else the federal government will have insufficient funds to pay its bills and will be forced to shut down a. surplus, lower b. deficit, raise c. surplus, lower d. none of the answers above are correct

b

the M1 definition of the money supply consists of... a. coins and currency in circulation b. coins and currency in circulation, and checkable deposits c. federal reserve notes, gold certificates, and checkable deposits d. federal reserve notes and bank loans

b

the federal government finances a budget deficit by... a. taxing businesses and households b. selling treasury securities c. printing more money d. reducing its purchases of goods and services

b

which of the following defines the "store of value" function of money? a. a common measurement of the relative value of different goods and services b. the ability of money to hold value over time c. the materials used to manufacture money are of medium grade so that people will not hoard money for its commodity value d. money that is widely accepted in exchange for goods and services

b

which of the following is a problem with barter? a. individuals will not exchange goods b. individuals' wants must coincide in order for there to be exchange c. goods can be exchanged but services cannot d. none of the above is a problem

b

which of the following is in charge of the buying and selling of government securities by the fed? a. president b. federal open market committee (fomc) c. congress d. none of the above

b

which of the following is not a characteristic of money? a. it provides a way to measure the relative value of goods and services b. it is always backed by something of high intrinsic value such as gold or silver c. it is generally acceptable as a medium of exchange d. it allows for saving and borrowing

b

which of the following is not one of the functions of the federal reserve? a. clearing checks b. printing currency c. supervising and regulating banks d. controlling the money supply

b

Which of these correctly describes the national debt? a. the excess of annual federal expenditures over annual federal tax revenues b. federal expenditures less annual federal tax revenues plus foreign u.s. annual bonds purchases c. the total amount of money owed by the federal government d. none of the answers above are correct

c

currently the national debt is approximately... a. $10 trillion b. $13 trillion c. $20 trillion d. $25 trillion

c

currently, approximately what percentage of the u.s. national debt is owed to foreigners? a. about 20 percent b. about 25 percent c. about 30 percent d. about 60 percent

c

if a society were to use a widely accepted, easily measurable, but highly perishable food product as its money , which of the following functions of money would be most impaired? a.medium of exchange b. unit of account c. store of value d. none of the answers above are correct

c

if the federal government runs a budget ____, then the national debt becomes ____. a. surplus, larger b. deficit, smaller c. surplus, lower d. none of the answers above are correct

c

the easier it is to convert an asset directly into goods and services without loss, the... a. less secure it is b. more secure it is c. more liquid it is d. less liquid it is

c

the major protection against sudden mass attempts to withdraw cash from banks is the... a. federal reserve b. consumer protection act c. deposit insurance provided by the FDIC d. gold and silver backing the dollar

c

which of the following countries has the smallest national debt as a percentage of GDP? a. Italy b. canada c. australia d. japan e. france

c

which of the following is not included when computing M1? a. coins in circulation b. currency in circulation c. savings accounts d. checking account entries

c

which of the following is not part of M1? a. checking accounts b. coins c. credit cards d. paper currency

c

M1 refers to a. the most narrowly defined money supply b. currency held by the public plus checking account balances c. the smallest dollar amount of the money supply definitions d. all of the answers above are correct

d

as the national debt grows as a percentage of the U.S. economy, which of the following is true? a. future u.s. citizens will be forced to spend a larger percentage of their tax revenues on servicing the national debt, limiting the money that is available for healthcare , education, and national defense b. if today's deficit spending is primarily designed to benefit people today, and is not being invested to make the economy grow, then we are robbing the future for the sake of the present c. if rising levels of federal borrowing today crowds out private borrowing for productive investment, then economic growth in the future will slow, and future living standards will fall. d. none of the answers above are correct

d

as the size of a nation's outstanding debt gets larger and larger relative to the size of the economy... a. eventually it will become difficult for the country to borrow in global credit markets b. the country will have to pay higher real interest rates in order to induce investors to purchase its bonds c. at some point, the country will be more or less forced to bring spending into line with revenues in order to maintain the confidence of investors d. all of the answers above are correct

d

currently, the national debt as a percentage of GDP is... a. about seven times its size in 1982 b. twice as large in 2000 c. approximately the same size in 1945 d. approximately the same size in 1950

d

which definition of the money supply includes credit cards, or "plastic money"? a. M1 b. M2 c. both a. and b. are correct d. neither a. or b. are correct

d

which of the following defines the "medium of exchange" function of money? a. to provide a common measurement of the relative value of different goods and services b. the availability of money to hold value over time c. the materials used to manufacture money are of medium grade so that people will not hoard money for its commodity value d. money that is widely accepted in exchange for goods and services

d

which of the following is false? a. the national debt's size increased sharply after world war II b. the national debt increases in size whenever the federal government has a budget surplus c. the national debt is currently about the same size as it was during WWII d. All of the answers above are false

d

which of the following is not a store of value? a. dollar b. money market mutual fund share c. checking account balance d. credit card

d

which of the following is part of the M2 definition of money supply, but not part of M1? a. checkable deposits b. currency held in banks c. currency in circulation d. money market mutual fund shares

d

which of the following statements about crowding out is true? a. it can completely offset the multiplier b. it is caused by a budget deficit c. it is not caused by a budget surplus d. all of the answers above are correct

d

which of the following statements about crowding out is true? a. it is caused by a budget surplus b. it is not caused by a budget surplus c. it cannot completely offset the multiplier effect of deficit government spending d. it affects interest rates and, in turn, consumption and investment spending

d

which of these institutions has the responsibility for controlling the money supply? a. commercial banks b. congress c. u.s. treasury department d. federal reserve system

d

supply-side economists argue that less government spending... a. will contract the positive side of the economy b. will result in more crowding out c. would cause interest rates to increase dramatically d. would make more investment capital available at lower rates of interest to the private sector

e

which of the following own a portion of the national debt? a. federal, state, and local governments b. private u.s. citizens c. banks d. foreigners e. all of the above answers are correct

e

yee?

haw.