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Practice Econ 4

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Econ 101 Test sobre Practice Econ 4, creado por mjheg el 06/05/2013.
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Test por mjheg, actualizado hace más de 1 año
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Pregunta 1

Pregunta
Which of the following rates does the Fed actually set?
Respuesta
  • the Federal Funds rate
  • the discount rate
  • the market interest rates
  • all of these rates

Pregunta 2

Pregunta
M1 includes
Respuesta
  • Currency, Checkable Deposits, Demand deposits
  • Currency, Federal Reserves, Checkable deposits
  • Checkable Deposits only
  • Currency, Checkable Deposits, Small time deposits

Pregunta 3

Pregunta
Why does so much U.S. currency circulate in other countries?
Respuesta
  • Several countries use the U.S. dollar as their official currency.
  • The U.S. dollar is frequently used in drug trafficking.
  • Dollars hold their value in unstable countries.
  • All of the above

Pregunta 4

Pregunta
In the United States, the amount of cash per capita is about $3,000. This figure
Respuesta
  • shows how much currency each American holds in their checking accounts.
  • misrepresents actual currency holdings in the United States because a lot of dollars are held outside the country.
  • accurately represents the size of the underground economy in the United States
  • shows how much the world depends on the U.S. monetary system.

Pregunta 5

Pregunta
The Federal Reserve's major tools to control the money supply are I. open market operations. II. discount rate lending and the term auction facility. III. required reserve ratio and payment of interest on reserves. IV. federal funds lending
Respuesta
  • I only
  • I, II
  • I, II, III
  • I, II, III, IV

Pregunta 6

Pregunta
The Federal Funds rate is the interest rate charged on a(n)
Respuesta
  • overnight loan from one bank to another.
  • low interest loan from the Federal Reserve to a bank.
  • loan from the Federal Reserve to a bank.
  • long-term loan from one bank to another.

Pregunta 7

Pregunta
Why is the SRAS curve steeper above its intersection with the Solow growth curve?
Respuesta
  • Wages are stickier in the upward direction.
  • Wages are less sticky in the upward direction
  • Lower inflation will lead to faster growth.
  • Employees become less motivated to work during times of unexpected inflation.

Pregunta 8

Pregunta
According to the quantity theory of money, an increase in money supply causes an increase in
Respuesta
  • prices
  • production
  • velocity of money
  • real GDP

Pregunta 9

Pregunta
The short-run aggregate supply curve shows a relationship between the real growth rate and the
Respuesta
  • actual inflation rate
  • expected inflation rate
  • long-run inflation rate
  • none of the above

Pregunta 10

Pregunta
How has the role of agricultural production changed in the Indian economy?
Respuesta
  • It is now only 1 percent of GDP.
  • It has fallen to about 20 percent of GDP due to economic diversification.
  • It has remained about 40 percent of GDP, but has doubled in yield.
  • It has become a greater part of GDP, due to technological advances.

Pregunta 11

Pregunta
Imagine that a government starts out with the budget surplus. If in the next period the government temporarily runs a budget deficit, what would you expect to happen to aggregate demand?
Respuesta
  • AD would increase
  • AD would decrease
  • AD would remain the same
  • AD would lie on the Solow growth curve

Pregunta 12

Pregunta
In the AD and SRAS model, changes in the growth rate of C, I, G, and NX tend to be changes in:
Respuesta
  • money velocity
  • money supply
  • prices
  • all of the above

Pregunta 13

Pregunta
The Solow growth rate is the rate of economic growth that occurs when
Respuesta
  • inflation is moderate
  • wages and prices are flexible
  • wages and prices are sticky
  • the money supply is growing

Pregunta 14

Pregunta
An increase in _______ will shift the SRAS curve
Respuesta
  • actual inflation, but not expected inflation
  • expected inflation, but not actual inflation
  • both expected and actual inflation
  • neither expected nor actual inflation

Pregunta 15

Pregunta
Suppose both the growth rate of the money supply and the velocity of money are fixed, then an increase in the growth rate of exports will cause
Respuesta
  • a shift of the dynamic AD curve to the right.
  • a shift of the dynamic AD curve to the left.
  • a downward movement along the dynamic AD curve.
  • an upward movement along the dynamic AD curve.

Pregunta 16

Pregunta
The aggregate demand curve shows all the combinations of ______ that are consistent with a specified rate of spending growth.
Respuesta
  • inflation and real GDP growth rates
  • employment rates and price levels
  • production shocks and flexible price
  • money velocity and money supply

Pregunta 17

Pregunta
n the basic AD and Solow growth curve model, shocks to aggregate demand always cause I. changes in real GDP. II. changes in inflation. III. changes in spending growth.
Respuesta
  • I only
  • I, II
  • II only
  • I, II, III

Pregunta 18

Pregunta
The Solow growth curve is represented by a vertical line at the Solow growth rate because I. it does not depend on the rate of inflation. II. there is an underlying assumption of strong money neutrality. III. it does not depend on the stock of factors of production
Respuesta
  • I only
  • I, II
  • I, III
  • I, II, III

Pregunta 19

Pregunta
Which of the following is a shock that could shift the Solow growth curve?
Respuesta
  • productivity shock
  • negative supply shock
  • real shock
  • all of the above

Pregunta 20

Pregunta
The average annual rate of growth of real GDP in the United States has fluctuated around ____ for the last 50 years.
Respuesta
  • 3%
  • 1%
  • 5%
  • -1%

Pregunta 21

Pregunta
What are some of the economic effects of a tariff?
Respuesta
  • Wealth is redistributed from wealthy nations to poor nations and taxes fall.
  • Unemployment and inflation rates both fall.
  • Capital and labor are used less efficiently.
  • Trade remains the same in the long run and GDP rises in the nation that enacts the tariff.

Pregunta 22

Pregunta
If wages are not as flexible as prices, an increase in money growth will lead to
Respuesta
  • an increase in inflation and a rise in real long-run GDP growth.
  • an increase in inflation but no rise in real short-run GDP growth.
  • an increase in inflation and firms profits.
  • no change in inflation, but a fall in firms' profits.

Pregunta 23

Pregunta
Politicians and especially the general public worry about recessions because of
Respuesta
  • unemployment
  • inflation
  • changes in the Solow Growth rate
  • All of the above

Pregunta 24

Pregunta
What factors triggered the Great Depression?
Respuesta
  • decreased consumer spending and tight monetary policy
  • decreased investment and increased inflation
  • decreased employment and increased money supply
  • decreased inflation and increased income taxes
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