UO macro final study pt.2
There are several reasons why the aggregate demand curve is downward sloping. Which of the following CORRECTLY describes one of these explanations?
A fall in the price level, holding foreign prices constant, increases real net exports.
Suppose the money multiplier is 2.5 and the Federal Reserve conducts an open market purchase that increases the monetary base by $5 million. What is the eventual increase in the quantity of money in the economy that results from this open market purchase?
$12.5 million
A bank has $100 million in deposits. It keeps $15 million of cash in the bank vault, has $10 million in deposits with the Federal Reserve, and owns $15 million in U.S. Treasury bonds. This bank's total reserves equal:
$25 million
The Federal Reserve System has ________ regional Federal Reserve Banks and ________ members of the Board of Governors.
12; 7
The Board of Governors of the Federal Reserve System consists of:
7 members appointed by the President of the United States
Aggregate demand is the relationship between the quantity of real GDP demanded and the ________.
price level
The Federal Open Market Committee (FOMC) is composed of:
The members of the Board of Governors and the Presidents of 5 Federal Reserve regional banks.
Which of the following shifts the aggregate demand curve rightward?
a decrease in taxes
Which of the following shifts the aggregate demand curve leftward?
a decrease in transfer payments
One result of a decrease in aggregate demand and no change in aggregate supply is:
a recession.
Which of the following factors could start a demand-pull inflation ?
an increase in exports
Which of the following does NOT shift the aggregate demand curve?
an increase in the price level
The purchase of $1 billion of U.S. Treasury bonds by the Federal Reserve is an example of:
an open market operation
A rise in the labor-force participation rate of women ____ the labor force and shifts the long-run aggregate supply curve ____.
increases; rightward
The long-run aggregate supply curve:
is vertical.
The sum of currency and bank's reserves held with the Federal Reserve is the ________.
monetary base
The short-run aggregate supply curve is upward sloping because:
nominal wage rates do not immediately change when the price level changes.
Monetary policy in the United States is conducted:
only by the Federal Reserve.
Suppose the nominal interest rate that makes the quantity of real money supplied equal the quantity of real money demanded is 5 percent. Also, suppose the current nominal interest rate is 7 percent. As a result:
people buy bonds and the nominal interest rate falls.
In the "macroeconomic short run":
real GDP can be different from potential real GDP.
In the macroeconomic long-run:
real GDP is equal to potential real GDP.
When the economy is at a below-full-employment equilibrium, ________.
real GDP is less than potential real GDP
In the short-run, real GDP can be greater than or less than potential GDP because in the short run the:
real wage rate has not fully adjusted to put the labor market in equilibrium
A change in ________ creates a movement along the aggregate demand curve but does not shift the aggregate demand curve.
the price level
According to the first substitution effect, when the price level rises and other things remain the same:
the real interest rate rises.
A decrease in the quantity of reserves held by commercial banks could be the result of
the sale of U.S. Treasury bonds by the Federal Reserve
