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
