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Frage 1
Frage
If, in the best case scenario, increased government spending were used to revive the economy from a recession, the increased spending would
Antworten
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be offset by a decrease in inflation
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be a little more than the fall in consumer confidence in order to help make up for lost GDP
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not need to be as large as the fall in consumer consumption
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be exactly the same as the fall in consumer consumption.
Frage 2
Frage
In what way are monetary and fiscal policies similar?
Antworten
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They both involve borrowing from the public
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They are both somewhat ineffective when it comes to combating real shocks
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They both target the aggregate demand curve to combat the business cycle
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All of these answers are correct
Frage 3
Frage
Mistimed contractionary fiscal policy can cause
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a recession
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inflation
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a real shock
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rising interest rates
Frage 4
Frage
Government spending becomes a more effective policy tool when
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consumers are too pessimistic and not spending
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interest rates in the economy are rising simultaneously
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the government raises taxes to finance spending
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the economy is above the Solow growth curve
Frage 5
Frage
An increase in government spending growth will cause inflation to fall in
Antworten
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the short run
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the long run
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both the short run and the long run
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neither the short run nor the long run
Frage 6
Frage
An increase in government spending growth will cause the AD curve to
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shift outward
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shift inward
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shift outward and then inward
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remain unchanged
Frage 7
Frage
If the government increases its spending, financing methods that can cause crowding out include 1)Selling Bonds 2)Raising corporate investment taxes 3)raising individual income taxes
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1,2
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2,3
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2 only
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none of the options
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1,2,3
Frage 8
Frage
The largest component of GDP is
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consumption
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investment
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government spending
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imports
Frage 9
Frage
When consumers reduce spending, the reduction in velocity of money is split between
Antworten
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decrease in inflation and decrease growth
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decrease in inflation and increase in growth
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decrease in the money supply and decrease in inflation
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decrease in the money supply and decrease in growth
Frage 10
Frage
Examples of expansionary fiscal policy include increases
I. in government spending.
II. in income taxes.
III. of the money supply
Antworten
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I only
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I & II
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II only
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II & III
Frage 11
Frage
Fiscal policy is well-suited to counteract a recession or depression when
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unemployment is low.
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taxes are high.
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a real negative shock occurs.
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resources are under utilized.
Frage 12
Frage
A decrease in consumption growth will cause aggregate demand to
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shift inward
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shift outward
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remain unchanged
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shift inward and then outward
Frage 13
Frage
In a typical year, changes in government spending compared to overall spending are relatively
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small
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large
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unpredictable
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well-timed
Frage 14
Frage
Which would be the most liquid?
Antworten
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Small time deposits
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small cut diamonds
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Monet oil painting
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money market mutual funds
Frage 15
Frage
When the Federal Reserve makes an open market purchase, the reserves of the banking system will
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increase
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decrease
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remain constant
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be too difficult to predict
Frage 16
Frage
What part of the money pyramid does the Fed have direct control over?
Antworten
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the monetary base
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M1
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M1 plus the monetary base
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M2
Frage 17
Frage
An increase in money growth will cause inflation to increase in
Antworten
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the long run
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the short run
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the long run and the short run
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neither the long run nor the short run
Frage 18
Frage
The members of the Board of Governors of the Federal Reserve have 14-year non-renewable terms. Thus,
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they are somewhat insulated from the political process.
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the chairman of the board of governors also has a 14-year term.
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every president of a federal reserve district bank will serve at least 14 years on the BOG.
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the New York Federal Reserve District Bank President can only serve 14 years on the FOMC.
Frage 19
Frage
If the Fed buys government bonds, then all of the following will likely increase except
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M1
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bank reserves
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the monetary base
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Federal Funds rate
Frage 20
Frage
When the Federal Reserve buys bonds, the supply curve for bond
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shifts inward
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shifts outward
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sometimes shifts inward, sometimes outward
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remains unchanged
Frage 21
Frage
When the Federal Reserve conducts monetary policy, the Federal Reserve usually focuses on
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M1
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M2
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Federal Funds rate
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the discount rate
Frage 22
Frage
Required reserves are the percent of
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deposits that banks are required to hold as reserves.
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reserves that banks are required to hold as reserves.
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loans that banks are required to hold as reserves.
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None of the answers is correct.
Frage 23
Frage
Which of the following assets would you classify as being most liquid?
Antworten
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small time deposits
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demand deposits
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a gold nugget
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a home
Frage 24
Frage
Which of the following is TRUE of the structure of the Fed?
I. All seven members of the Board of Governors are appointed by the President.
II. The Fed is an agency of the federal government.
III. The Secretary of the Treasury chairs the Federal Open Market Committee.
Antworten
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I only
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I & II
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I & III
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I,II, & III
Frage 25
Frage
As a result of an increase in the growth rate of money supply
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real GDP growth rate increases only in the short run, and the inflation rate increases in both the short run and the long run.
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real GDP growth rate increases only in the long run, and the inflation rate increases only in the short run.
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real GDP growth rate increases in both the short run and the long run, and the inflation rate increases only in the short run.
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both the real growth rate and the inflation rate increase only in the short run.
Frage 26
Frage
When the Fed conducts open market operations to decrease the monetary base, real GDP growth
Antworten
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increases in the long run
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decreases in the long run
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decreases in both the short run and the long run
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increases in both the short run and the long run
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