Macroeconomics Review
If the required reserve ratio is .2 and a bank receives a deposit of $100, how much will be the bank's required reserves? Question 18 options: 1) $20 2) $100 3) $80 4) $500 5) other
$20
If the money /deposit multiplier is 5 and a bank receives a deposit of $100, what is the maximum amount of loans which the banking system as a whole may create? Question 24 options: 1) $80 2) $100 3) $400 4) $500 5) other
$400
If the money /deposit multiplier is 5 and a bank receives a deposit of $100, what is the maximum amount of checkable deposits which the banking system as a whole may create? Question 23 options: 1) $80 2) $100 3) $400 4) $500 5) other
$500
If the required reserve ratio is .2 and a bank receives a deposit of $100, what is the maximum amount of checkable deposits which the banking system as a whole may create? Question 22 options: 1) $20 2) $80 3) $100 4) $400 5) $500 6) other
$500
If the required reserve ratio is .2 and a bank receives a deposit of $100, how much will be the bank's excess reserves? Question 19 options: 1) $20 2) $100 3) $80 4) $500
$80
If the required reserve ratio is .2 and a bank receives a deposit of $100, what is the maximum amount which it may loan? Question 20 options: 1) $20 2) $100 3) $80 4) $500 5) other
$80
Last year a business firm planned to keep its inventory constant. It expected to sell $900 worth of output and so produced $900 worth of output. However, it only sold $850 of its output. It also bought a new machine for $200. Its I, Id and Iu were: Question 15 options: 1) $200, 200, 200 2) $250, $200, $50 3) $200, 200, 0 4) $1100, 200, 0 5) other
$250, $200, $50
If the MPC = .75, the multiplier is: Question 4 options: 1) .25 2) 1.25 3) 4 4) 5 5) other
4
If the regular multiplier (m) is 5, then the tax multiplier (t) will be: Question 1 options: 1) 1 2) 4 3) 5 4) 6 5) other
4
If the MPS = .2, the multiplier will be: Question 3 options: 1) 10 2) .8 3) 1.25 4) 5 5) 4 6) other
5
If Investment increases by 10 and the multiplier is 5, what will be the change in equilibrium GDP? Question 6 options: 1) 10 2) 2 3) 50 4) .5 5) other
50
If my MPC is .8 and my disposable income increases by 100, by how much will my consumption increase? Question 3 options: 1) 8 2) 100 3) 20 4) 80
80
A decrease in personal income taxes will shift the ___ curve to the ___. Question 3 options: 1) AD, right 2) AD, left 3) SRAS, right 4) SRAS, left
AD, right
In order to lower the rate of inflation, the money supply should be increased.
False
The full effect of the multiplier process will occur within one month. Question 9 options: 1) True 2) False
False
Variations in which component of aggregate expenditure are most likely to cause business cycle activity? Question 3 options: 1) C 2) I 3) G 4) Xn
I
If aggregate expenditure exceeds GDP then: Question 6 options: 1) IU > 0 2) IU < 0 3) IU = 0 4) can't say
IU < 0
The multiplied effect on GDP from a change in taxes is smaller than the multiplied effect of the same size change in government spending. Question 14 options: 1) True 2) False
True
According to Keynes, the major determinant of consumption is:
YD
To a bank, a checkable deposit is classified as: Question 3 options: 1) an asset 2) a liability 3) vault cash 4) excess reserves 5) bank capital
a liability
Keynes' macroeconomic theory emphasizes the primary role of:
aggregate expenditure
According to Keynesian economists, what is the cause of recessions?
decrease in aggregate expenditure
An increase in capacity utilization will cause investment to: Question 6 options: 1) increase 2) decrease 3) stay the same/no effect 4) an effect - but inconsistent direction
increase
Fiscal policy refers to government policy involving:
taxes and government spending
An increase in wealth will shift the C curve: Question 18 options: 1) up 2) down 3) not cause a shift
up
What is the shape of the LRAS? Question 10 options: 1) horizontal 2) upward sloping 3) downward sloping 4) vertical 5) other
vertical
If the spending multiplier (m) = 5 and there is an increase in taxes of 10 what will be the change in equilibrium income? Question 4 options: 1) -10 2) -40 3) -50 4) +40 5) +50 6) other
-40
If the tax multiplier (t) = 4 and there is an increase in taxes of 10 what will be the change in equilibrium income? Question 3 options: 1) -10 2) -40 3) -50 4) +40 5) +50 6) other
-40
f the tax multiplier (t) = 4 and there is an increase in taxes of 10 what will be the change in equilibrium income? Question 16 options: 1) -10 2) -50 3) -40 4) +50 5) +40 6) other
-40
Suppose that YE =200 and YFE = 230, and m = 6 what change in taxes is necessary to close the gap? Question 7 options: 1) 30 2) 6 3) 5 4) -6 5) -5 6) other
-6
If the MPC = .8, the value of the MPS is: Question 4 options: 1) .80 2) .10 3) .20 4) 5
.20
Which of the following most closely approximates the actual MPC in the U.S.? 1) .25 2) .5 3) .75 4) .9
.9
If the multiplier (m) = 5 and government spending (G) and taxes are both increased by 10, what will be the change in equilibrium GDP (YE)? Question 7 options: 1) 0 2) 10 3) 40 4) 50 5) other
10
If an investment cost $1000 and is expected to yield a profit of $100 per year over its life, the rate of return is: Question 8 options: 1) $100 2) 100% 3) $10 4) 10% 5) other
10%
What is the value of YE if I = 8 G = 5 XN = 3 CA = 4 TX = 2 and MPC =.9 ? Question 5 options: 1) 180 2) 182 3) 190 4) 200 5) 220 6) other
182
The real world multiplier is approximately: Question 10 options: 1) 0 2) 1 3) 2 4) 4 5) 5 6) 10
2
The real world multiplier is approximately: Question 11 options: 1) 10 2) .9 3) 5 4) 2 5) .1
2
The real-world money multiplier is in the US is approximately: Question 31 options: 1) 4 2) 5 3) 10 4) .1 5) 2 6) other
2
If the regular multiplier (m) is 5, then the tax multiplier (t) will be: Question 15 options: 1) 1 2) 4 3) 5 4) 6 5) other
4
If the required reserve ratio is .25, what is the value of the deposit or money multiplier? Question 21 options: 1) .75 2) .25 3) 4 4) 5 5) 10 6) other
4
Suppose that YE =200 and YFE = 230, and m = 6 what change in government spending is necessary to close the gap? Question 6 options: 1) 30 2) 6 3) 5 4) -6 5) -5 6) other
5
Suppose that YE =200 and YFE = 230, and m = 6 what change in transfers is necessary to close the gap? Question 8 options: 1) 30 2) 6 3) 5 4) -6 5) -5 6) other
6
If a recessionary gap exists, what is true of the unemployment rate? Question 6 options: 1) >5% 2) < 5% 3) =5% 4) other
>5%
Which of the following was not cited in the class notes as affecting the amount of planned investment? Question 7 options: 1) operating costs 2) business taxes 3) innovation 4) expectation about demand 5) All were included in the notes
All were included in the notes
On a consumption graph the y-axis intercept equals: Question 15 options: 1) MPC 2) YD 3) MPS 4) CA 5) CI
CA
Which theory believed in Say's Law? Question 7 options: 1) Classical 2) Keynesians 3) both 4) neither
Classical
Which theory believed in flexible wages and prices? Question 8 options: 1) Classical 2) Keynesians 3) both 4) neither
Classical
If output (GDP or Y) is greater than aggregate expenditure (AE), then GDP will: Question 5 options: 1) increase 2) decrease 3) stay the same 4) can't say
Decrease
Which of the following is a liability for a bank? Question 1 options: 1) Loans 2) Deposits 3) Reserves 4) Bonds
Deposits
What institution insures bank deposits against losses? Question 9 options: 1) treasury 2) Fed 3) Mint 4) Congress 5) FDIC
FDIC
A bank loan is an example of direct finance while bond and stock transactions are examples of financial intermediation. Question 1 options: 1) True 2) False
False
All differences between Keynesian and non-Keynesian economics have recently been resolved and there is now one universally accepted macro-theory. Question 6 options: 1) True 2) False
False
All economists today believe that the economy automatically goes to equilibrium at full-employment GDP. Question 1 options: 1) True 2) False
False
All financial intermediaries are nonprofit entities. Question 6 options: 1) True 2) False
False
All financial intermediaries are regulated by some government agency. Question 8 options: 1) True 2) False
False
All financial intermediaries' accounts are insured by state or federal agencies such as FDIC. Question 7 options: 1) True 2) False
False
Banks usually try to keep the amount of excess reserves which they hold as high as possible. Question 29 options: 1) True 2) False
False
Consumers can never consume more than their incomes since the MPC must be less than 1.0.
False
Discretionary fiscal policy has been used more often in the last 30 years than has monetary policy. 1) True 2) False
False
Excess reserves refer to the minimum amount of actual reserves a bank must keep on hand against its customers' deposits. Question 16 options: 1) True 2) False
False
Fractional reserve banking is illegal in the US according to the Glass-Steagall Act (1933) Question 15 options: 1) True 2) False
False
In a barter economy goods and services are exchanged strictly for coins or paper money - no checks. Question 2 options: 1) True 2) False
False
Keynesian economists believe that the economy has an automatic mechanism which brings the economy to equilibrium GDP (YE) at full employment GDP (YFE). Question 1 options: 1) True 2) False
False
Keynesians argue that any gap that exist will automatically be eliminated in a reasonably short period of time. Question 3 options: 1) True 2) False
False
The money multiplier is basically constant - changing very little over time. Question 30 options: 1) True 2) False
False
There is no limit to the amount of money that banks can create in the current U.S. monetary system. Question 25 options: 1) True 2) False
False
Who conducts monetary policy?
Fed
Who issues the paper money used in the US? Question 9 options: 1) treasury 2) FDIC 3) IRS 4) Fed 5) Congress
Fed
The money supply in the U.S. is determined by the : Question 26 options: 1) Fed only 2) Fed and the Treasury 3) Fed and the banks 4) Fed, the public and the banks
Fed, the public and the banks
The required reserve ratio is set by the: Question 13 options: 1) Treasury 2) Congress 3) Wall Street 4) Federal Reserve 5) Comptroller of the Currency
Federal Reserve
What is the name of the economist who wrote the General Theory which purported to explain business cycles?
Keynes
What is the name of the economist who wrote the General Theory which purported to explain business cycles? Question 10 options: 1) Smith 2) Obama 3) Ricardo 4) Yellen 5) Keynes
Keynes
Which theory believes that the market system has significant failures requiring government intervention to correct ? Question 9 options: 1) Classical 2) Keynesians 3) both 4) neither
Keynesians
Economic growth is shown by a shift in: Question 13 options: 1) SRAS 2) LRAS 3) AD 4) both SRAS and AD
LRAS
On a consumption graph the slope equals: Question 16 options: 1) MPC 2) YD 3) MPS 4) CA 5) CI
MPC
Which of the following is not a financial intermediary? Question 2 options: 1) bank 2) saving and loan (S&L) 3) credit union 4) NY stock market 5) all are financial intermediaries
NY stock market
The SRAS curve shows a (positive? or negative? or other?) relationship between ___ and ___.
Positive/RGDP and price level
Aggregate expenditure does not include:
S
Which of the following is not a component of aggregate demand? Question 1 options: 1) C 2) G 3) XN 4) S 5) I
S
Which of the following is not true at equilibrium GDP? Question 3 options: 1) GDP = C + I + G + XN 2) IU = 0 3) AE = output 4) Y = C+I+G+XN 5) S = C
S = C
According to non-Keynesians, if a recessionary gap exists, the ___ curve will shift ___ in the long run. Question 8 options: 1) SRAS, right 2) SRAS, left 3) AD, right 4) AD, left 5) LRAS, right 6) LRAS, left
SRAS, right
A bank run occurs when a majority of depositors want to withdraw their money at the same time. Question 8 options: 1) True 2) False
True
A deposit of cash in banks by the public permits a multiple expansion of the money supply (deposits) and loans by the banking system. Question 6 options: 1) True 2) False
True
An increase in transfers of $10 billion will have the same effect on equilibrium GDP as a decrease in taxes of $10 billion. Question 17 options: 1) True 2) False
True
An increase in transfers of $10 billion will have the same effect on equilibrium GDP as a decrease in taxes of $10 billion. Question 6 options: 1) True 2) False
True
At equilibrium, saving will equal planned investment, if there is no government and foreign sectors. Question 4 options: 1) True 2) False
True
At the same time financial intermediaries provide lenders with a safe haven for their funds while at the same time making risky loans. Question 5 options: 1) True 2) False
True
Business firms invest in order to replace or increase existing capacity to be able to produce the quantity of output that expect they can sell at a profit. Question 2 options: 1) True 2) False
True
Classical economics believed that long term recessions were not possible except as a result of non-economic causes such as wars, political upheavals, drought, etc. Question 1 options: 1) True 2) False
True
Due to political considerations, Congress is more likely to implement fiscal policy when the problem is a recession than when the problem is inflation. Question 9 options: 1) True 2) False
True
Due to the multiplier process, an increase in aggregate expenditure will cause GDP to increase by more than the initial increase in spending. Question 1 options: 1) True 2) False
True
Economists believe that the real world multiplier is both smaller and more variable than the simple formula (m=1/MPS) predicts. Question 10 options: 1) True 2) False
True
Equilibrium GDP occurs where the output produced just equals desired aggregate expenditure. Question 2 options: 1) True 2) False
True
Financial intermediaries can provide lenders and borrowers with attributes that they can't get directly from each other. Question 3 options: 1) True 2) False
True
Financial intermediaries provide more lending and borrowing opportunities than would exist in their absence and hence make both lenders and borrowers better off. Question 4 options: 1) True 2) False
True
I = Ip + Iu Question 10 options: 1) True 2) False
True
If a business firm expects sales of $500 and wants to keep inventories constant it should produce exactly $500 worth of output. Question 13 options: 1) True 2) False
True
In a stochastic/probabilistic world step-by-step policy may be preferred to a once-and-done policy. Question 12 options: 1) True 2) False
True
In the real world autonomous consumption is approximately zero Question 17 options: 1) True 2) False
True
Iu (unplanned investment) equals the difference between expected sales minus actual sales. Question 11 options: 1) True 2) False
True
Money is destroyed when loans are repaid. Question 7 options: 1) True 2) False
True
Originally, Keynesian economists believed that a relatively small change in government spending and the federal deficit will lead to large changes in GDP. Question 10 options: 1) True 2) False
True
Regardless of the type of spending initiating the process, ultimately all sectors of the economy will be impacted by the multiplier process. Question 8 options: 1) True 2) False
True
The 45 degree line goes through the points (0,0), (100, 100), (200,200), etc. Question 13 options: 1) True 2) False
True
The 45 degree line shows points where planned aggregate expenditure equals real GDP. Question 14 options: 1) True 2) False
True
The larger the MPC the larger will be the multiplier Question 5 options: 1) True 2) False
True
The major advantage of automatic stabilizers over discretionary fiscal policy is that they eliminate all the lags except the effectiveness lag. Question 6 options: 1) True 2) False
True
The maximum expansion of deposits as depicted by the deposit multiplier occurs only if banks hold no excess reserves there are no currency drains. Question 28 options: 1) True 2) False
True
The money supply changes every day as a result of decisions by the Fed, the banks and/or the public. Question 27 options: 1) True 2) False
True
The multiplied effect on GDP from a change in taxes is smaller than the multiplied effect of the same size change in government spending. Question 2 options: 1) True 2) False
True
The multiplier process is a chain reaction with each step smaller than the one before. Question 7 options: 1) True 2) False
True
The same increase in consumption, investment, government spending or net exports will cause GDP to increase by the same multiple amount. Question 2 options: 1) True 2) False
True
According to Keynesians, the economy will eventually, automatically end up at: Question 2 options: 1) YFE 2) YP 3) YE 4) actual GDP 5) other or can't say
YE
Write the equation for this specific consumption function.
[C =CA + MPC Yd]
Name a change or factor cited in the class notes that could cause economic growth.
[Increase in labor force] [Increase in human capital (education)] [Increase in capital] [Increase in technology] [Increase in other resources, etc.
According to non-Keynesians, which market adjustment is primary in the long run adjustment mechanism?
[labor market]
To a bank, a loan to a customer is classified as: Question 2 options: 1) an asset 2) a liability 3) vault cash 4) excess reserves 5) bank capital
an asset
Built-in features of our economy that tend to stabilize GDP are called: Question 4 options: 1) automatic stabilizers 2) public works programs 3) full employment bills 4) countercyclical propensities 5) tools of discretionary policy
automatic stabilizers
The part of consumption which depends on things other than income such as wealth, interest rates, debt, etc. is: Question 6 options: 1) induced 2) autonomous 3) marginal 4) luxury
autonomous
Legal reserves may be kept only in the form of : Question 15 options: 1) vault cash 2) vault cash + bank deposits at the Federal Reserve + government securities 3) bank deposits at the Federal Reserve 4) bank deposits at the Federal Reserve + vault cash 5) any highly liquid asset
bank deposits at the Federal Reserve + vault cash
Double coincidence of wants applies to a: Question 3 options: 1) money economy 2) barter economy 3) both equally 4) neither
barter economy
Crowding out is a major concern with which method of financing a government budget deficit? Question 8 options: 1) borrowing 2) taxes 3) printing new money 4) all of them
borrowing
Banks must keep required reserves equal to a fraction of: Question 14 options: 1) all loans 2) cash 3) checkable deposits 4) all bank assets 5) mortgage loans
checkable deposits
Which of the following is the largest component of the money supply (M1) in America? Question 7 options: 1) coins 2) paper money 3) checkable deposits 4) credit cards 5) T-bills
checkable deposits
Who conducts fiscal policy?
congress and the president
Which of the following is not included in the economist's definition of money (M1)? Question 8 options: 1) coins 2) paper money 3) checkable deposits 4) credit cards 5) all are included
credit cards
Which lag in the use of fiscal policy is the shortest? Question 3 options: 1) jet lag 2) data lag 3) effectiveness lag 4) transmission lag 5) legislative lag
data lag
According to non-Keynesians, if a recessionary gap exists, what will happen to wages? Question 7 options: 1) increase 2) decrease 3) stay the same 4) can't say
decrease
An increase in interest rates will cause investment to: Question 4 options: 1) increase 2) decrease 3) stay the same/no effect 4) an effect - but inconsistent direction
decrease
If IU > 0, then GDP will: Question 7 options: 1) increase 2) decrease 3) stay the same
decrease
The onset of a unanticipated recession is liable to: Question 14 options: 1) increase both Ip and Iu 2) decrease both Ip and Iu 3) decrease Ip and increase Iu 4) increase Ip and decrease Iu 5) other 6) can't say/unpredictable
decrease Ip and increase Iu
A leftward shift of the SRAS curve will cause RGDP to ___ and Prices to ___ : Question 4 options: 1) increase, increase 2) increase, decrease 3) decrease, increase 4) decrease, decrease
decrease, increase
Say's Law states that supply creates its own: Question 2 options: 1) economic growth 2) GDP 3) problems 4) demand 5) inflation
demand
Which one of the following is presently a major deterrent to bank runs/panics in the United States? Question 12 options: 1) the legal reserve requirement 2) the fractional reserve system 3) deposit insurance 4) corporate income tax 5) gold at Ft. Knox
deposit insurance
A loan from the Federal Reserve to a commercial bank is called: Question 11 options: 1) federal funds 2) bank loan 3) Fed loan 4) discount 5) open market operation
discount
After a policy measure is implemented, it takes time to affect the economy best describes the: Question 2 options: 1) wait-and-see lag 2) data lag 3) effectiveness lag 4) transmission lag 5) none of the above
effectiveness lag
The maximum a bank may legally loan out equals its: Question 17 options: 1) total reserves 2) required reserves 3) excess reserves 4) required reserves plus excess reserves 5) required reserves minus excess reserves
excess reserves
A depreciation of the dollar will cause the economy to:
expand
An open market purchase of securities will cause the economy to:
expand
A commercial bank can receive a loan from another commercial bank in the: Question 10 options: 1) federal funds market 2) bank loan market 3) Fed market 4) discount market 5) open market operation
federal funds market
What term describes the situation where there is more money than reserves to back that money? Question 14 options: 1) exchange rates 2) branch banking 3) financial intermediary 4) reserve requirement 5) fractional reserve banking
fractional reserve banking
The basic requirement of money is that it be: Question 1 options: 1) backed by precious metals--gold or silver 2) some form of debt or credit 3) generally accepted as a medium of exchange 4) authorized as legal tender by the central government
generally accepted as a medium of exchange
Induced Consumption is consumption that depends on: Question 7 options: 1) wealth 2) interest rates 3) taxes 4) income 5) other
income
Keynes argued that saving is more influenced by: Question 4 options: 1) interest rates 2) inflation 3) stock market 4) income 5) holiday spending
income
An increase in GDP or expected GDP will cause investment to: Question 5 options: 1) increase 2) decrease 3) stay the same/no effect 4) an effect - but inconsistent direction
increase
Fiscal policies designed to close a recessionary gap will likely cause inflation to: Question 4 options: 1) decrease 2) stay the same 3) increase 4) can't say
increase
Increasing government spending or cutting taxes to combat unemployment is likely to cause the deficit to:
increase
Using fiscal policy to combat a recession will likely cause inflation to:
increase
Suppose that an increase on government spending of 10 is necessary to eliminate a recessionary gap of 50, other things equal, what will happen to the government's budget deficit? Question 9 options: 1) increase by 5 2) increase by 10 3) increase by 50 4) stay the same 5) decrease 6) can't say
increase by 10
Which of the following would not cause a shift in the graph of the consumption function? Question 19 options: 1) increase in wealth 2) increase in disposable income 3) decrease in interest rates 4) decrease in taxes 5) all of the above would increase autonomous consumption
increase in disposable income
Which of the following is an appropriate fiscal policy which could be used to fight inflation?
increase taxes
Economic growth will cause RGDP to ___ and prices to ___. Question 14 options: 1) increase, increase 2) increase, decrease 3) decrease, increase 4) decrease, decrease
increase, decrease
Suppose that YE =210 and YFE = 200. What kind of gap exists? Question 5 options: 1) recessionary 2) inflationary 3) deficit 4) surplus 5) Keynesian
inflationary
The classical economists argued that saving will be matched by an equal amount of investment because of: Question 3 options: 1) wage flexibility 2) price flexibility 3) money flexibility 4) interest rate flexibility 5) real balance effect
interest rate flexibility
If i (interest rate) = 7% and r (expected rate of return on investment) = 8%, a business will: Question 9 options: 1) invest 2) not invest 3) can't say/unpredictable
invest
The store of value function of money refers to the ability of money to: Question 5 options: 1) facilitate the exchange of goods and services 2) maintain its value over time 3) express relative scarcity 4) earn interest over time 5) increase its value over time
maintain its value over time
What transaction by a bank creates money? Question 5 options: 1) making loans 2) accepting deposits 3) sending cash to the Fed 4) cashing checks Fed
making loans
Which of the following is not an automatic stabilizer in the US economy? Question 5 options: 1) income taxes 2) unemployment compensation 3) welfare 4) minimum wages
minimum wages
Which method of financing government spending will allow the greatest impact on the GDP? Question 7 options: 1) taxes 2) borrowing 3) money creation 4) deprecate the dollar
money creation
What backs the money supply in America? Question 10 options: 1) gold 2) silver and gold 3) silver, gold, and other valuable materials 4) China 5) nothing
nothing
According to non-Keynesians, in long run, demand-side economic policy can effect: Question 12 options: 1) RGDP only 2) prices only 3) both RGDP and prices 4) neither RGDP nor prices
prices only
Which of the following is not included in investment as the economist uses the word? Question 1 options: 1) purchase of new machines 2) increase in inventories 3) decrease in inventories 4) purchase of 100 shares of Apple, Inc. stock 5) all are included
purchase of 100 shares of Apple, Inc. stock
Stagflation is the simultaneous occurrence of: Question 5 options: 1) inflation and currency depreciation 2) economic growth and higher prices 3) recession and inflation 4) depression and recession 5) recession and currency appreciation
recession and inflation
If YE <YFE, what kind of gap will exist? Question 5 options: 1) income gap 2) productivity gap 3) inflationary gap 4) recessionary gap
recessionary gap
Which of the following would be an example of a near money? Question 13 options: 1) coins 2) currency 3) checkable deposits 4) savings account 5) credit card
savings account
M2 contains everything that M1 contains plus some highly liquid assets such as: Question 12 options: 1) government securities 2) stocks 3) bonds 4) savings deposits 5) gold
savings deposits
Iu is: Question 12 options: 1) always > 0 (positive) 2) always < 0 (negative) 3) sometimes positive and sometimes negative 4) can't say/unpredictable
sometimes positive and sometimes negative
Which of the following was not listed in the class notes as a function of money? Question 4 options: 1) store of value 2) medium of exchange 3) unit of account 4) source of credit
source of credit
Renee deposits cash in his/her checking account. This single action causes the money supply (M1) to: Question 11 options: 1) increase 2) decrease 3) stay the same 4) can't say
stay the same
Renee deposits cash in his/her checking account. This single action causes the money supply (M1) to: Question 4 options: 1) increase 2) decrease 3) stay the same 4) can't say
stay the same
Graphically, equilibrium GDP occurs where the C+I+G+ XN curve crosses: Question 12 options: 1) the vertical axis 2) the horizontal axis 3) the Consumption curve 4) the 45 degree line 5) the savings line
the 45 degree line
Which of the following is not an example of a "lag" that diminishes the potential impact of fiscal policy? Question 1 options: 1) the data lag 2) the recessionary lag 3) the legislative lag 4) the transmission lag
the recessionary lag
Which government policy is least often used to try to manage the economy, i.e., control unemployment and inflation?
trade policy
According to non-Keynesians, long run equilibrium occurs where SRAS = AD = LRAS = YFE. Question 9 options: 1) true 2) false
true
When a consumer is comparing one price to another, money is primarily functioning as a: Question 6 options: 1) store of value 2) unit of account 3) checkable deposit 4) medium of exchange
unit of account