Unit 5 Economics quiz

Money that a retired person receives during retirement is known as:

A pension.

The following term describes a stock in a company that reinvests all profits back into the company:

Growth Stock

The Laffer curve purports to demonstrate the following scenario:

High tax rates may reduce total tax revenue.

The following term describes a stock that pays dividends to stockholders:

Income stock.

The following term refers to the time when payment is due to a bondholder:

Maturity.

The following term describes a type of investment that pools money from a variety of smaller investors and invests the money in stocks, bonds, and other investments:

Mutual fund.

A system of exchange where goods or services are directly exchanged for other goods or services without using is known as:

A barter system.

The leader of the Federal Reserve is known as:

The chair

The federal government strives to maintain the following rate of inflation:

1 to 2 percent.

The number of Federal Reserve branch banks is:

12

John Maynard Keyes argued that the following factor determined the level of economic activity:

Aggregate demand.

John Maynard Keynes would best be described as an advocate of:

Demand-side economics.

Economists who believe the government should have little, if any, role in the economy would be described as following:

Classical economics.

The federal funds rate is the interest rate charged by:

Commercial banks making overnight loans to other banks.

A gold coin would be an example of:

Commodity money.

The interest rate that a bond issuer will pay to the bondholder is known as:

Coupon rate.

The assignment of different parts of a manufacturing process or task to different people is known as:

Division of labor.

The multiplier effect can best be described as follows:

Every one dollar change in government spending produces a change greater than one dollar in the national income.

The U.S. dollar today is an example of:

Fiat money.

Supply-side advocates argue that tax rate cuts:

Increase total employment.

The inability to pay one's debts is known as:

Insolvency.

A bank run can best be described as follows:

Panicky depositors who want to take all their money out of a bank.

The following term describes a stock that trades at a low price with few shares offered:

Penny Stock

A stock dividend can best be described as follows:

Portions of company profits paid to stockholders.

Money paid in regular installments for life insurance is known as a:

Premium.

If the Fed raises the discount rate, then commercial banks will likely:

Reduce their borrowing of reserves.

Which of the following duties is NOT performed by the Fed?

Supervising credit unions.

The term "Reaganomics" is often used to describe:

Supply-side economics.

Which of the following would NOT be considered a major role played by money?

Symbol of government power.

The following outcome will occur if the Fed raises the reserve requirement for member banks:

There is less money available for loans.

Which of the following is NOT a function of the Federal Reserve?

To collect taxes from taxpayers.

Which of the following would NOT be a primary duty of the Securities and Exchange Commission?

To exchange stocks and bonds.

Which of the following would NOT be considered a major role played by banks?

To serve as a tax payment center.

The following unemployment rate is considered to be ideal:

Under 5 percent.

The annual rate of return on a bond if it were held to maturity is known as:

Yield