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Econ 101 Test sobre Practice Econ 3, creado por mjheg el 05/05/2013.

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Practice Econ 3

Pregunta 1 de 26

1

If, in the best case scenario, increased government spending were used to revive the economy from a recession, the increased spending would

Selecciona una de las siguientes respuestas posibles:

  • be offset by a decrease in inflation

  • be a little more than the fall in consumer confidence in order to help make up for lost GDP

  • not need to be as large as the fall in consumer consumption

  • be exactly the same as the fall in consumer consumption.

Explicación

Pregunta 2 de 26

1

In what way are monetary and fiscal policies similar?

Selecciona una de las siguientes respuestas posibles:

  • They both involve borrowing from the public

  • They are both somewhat ineffective when it comes to combating real shocks

  • They both target the aggregate demand curve to combat the business cycle

  • All of these answers are correct

Explicación

Pregunta 3 de 26

1

Mistimed contractionary fiscal policy can cause

Selecciona una de las siguientes respuestas posibles:

  • a recession

  • inflation

  • a real shock

  • rising interest rates

Explicación

Pregunta 4 de 26

1

Government spending becomes a more effective policy tool when

Selecciona una de las siguientes respuestas posibles:

  • consumers are too pessimistic and not spending

  • interest rates in the economy are rising simultaneously

  • the government raises taxes to finance spending

  • the economy is above the Solow growth curve

Explicación

Pregunta 5 de 26

1

An increase in government spending growth will cause inflation to fall in

Selecciona una de las siguientes respuestas posibles:

  • the short run

  • the long run

  • both the short run and the long run

  • neither the short run nor the long run

Explicación

Pregunta 6 de 26

1

An increase in government spending growth will cause the AD curve to

Selecciona una de las siguientes respuestas posibles:

  • shift outward

  • shift inward

  • shift outward and then inward

  • remain unchanged

Explicación

Pregunta 7 de 26

1

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

Selecciona una de las siguientes respuestas posibles:

  • 1,2

  • 2,3

  • 2 only

  • none of the options

  • 1,2,3

Explicación

Pregunta 8 de 26

1

The largest component of GDP is

Selecciona una de las siguientes respuestas posibles:

  • consumption

  • investment

  • government spending

  • imports

Explicación

Pregunta 9 de 26

1

When consumers reduce spending, the reduction in velocity of money is split between

Selecciona una de las siguientes respuestas posibles:

  • decrease in inflation and decrease growth

  • decrease in inflation and increase in growth

  • decrease in the money supply and decrease in inflation

  • decrease in the money supply and decrease in growth

Explicación

Pregunta 10 de 26

1

Examples of expansionary fiscal policy include increases
I. in government spending.
II. in income taxes.
III. of the money supply

Selecciona una de las siguientes respuestas posibles:

  • I only

  • I & II

  • II only

  • II & III

Explicación

Pregunta 11 de 26

1

Fiscal policy is well-suited to counteract a recession or depression when

Selecciona una de las siguientes respuestas posibles:

  • unemployment is low.

  • taxes are high.

  • a real negative shock occurs.

  • resources are under utilized.

Explicación

Pregunta 12 de 26

1

A decrease in consumption growth will cause aggregate demand to

Selecciona una de las siguientes respuestas posibles:

  • shift inward

  • shift outward

  • remain unchanged

  • shift inward and then outward

Explicación

Pregunta 13 de 26

1

In a typical year, changes in government spending compared to overall spending are relatively

Selecciona una de las siguientes respuestas posibles:

  • small

  • large

  • unpredictable

  • well-timed

Explicación

Pregunta 14 de 26

1

Which would be the most liquid?

Selecciona una de las siguientes respuestas posibles:

  • Small time deposits

  • small cut diamonds

  • Monet oil painting

  • money market mutual funds

Explicación

Pregunta 15 de 26

1

When the Federal Reserve makes an open market purchase, the reserves of the banking system will

Selecciona una de las siguientes respuestas posibles:

  • increase

  • decrease

  • remain constant

  • be too difficult to predict

Explicación

Pregunta 16 de 26

1

What part of the money pyramid does the Fed have direct control over?

Selecciona una de las siguientes respuestas posibles:

  • the monetary base

  • M1

  • M1 plus the monetary base

  • M2

Explicación

Pregunta 17 de 26

1

An increase in money growth will cause inflation to increase in

Selecciona una de las siguientes respuestas posibles:

  • the long run

  • the short run

  • the long run and the short run

  • neither the long run nor the short run

Explicación

Pregunta 18 de 26

1

The members of the Board of Governors of the Federal Reserve have 14-year non-renewable terms. Thus,

Selecciona una de las siguientes respuestas posibles:

  • they are somewhat insulated from the political process.

  • the chairman of the board of governors also has a 14-year term.

  • every president of a federal reserve district bank will serve at least 14 years on the BOG.

  • the New York Federal Reserve District Bank President can only serve 14 years on the FOMC.

Explicación

Pregunta 19 de 26

1

If the Fed buys government bonds, then all of the following will likely increase except

Selecciona una de las siguientes respuestas posibles:

  • M1

  • bank reserves

  • the monetary base

  • Federal Funds rate

Explicación

Pregunta 20 de 26

1

When the Federal Reserve buys bonds, the supply curve for bond

Selecciona una de las siguientes respuestas posibles:

  • shifts inward

  • shifts outward

  • sometimes shifts inward, sometimes outward

  • remains unchanged

Explicación

Pregunta 21 de 26

1

When the Federal Reserve conducts monetary policy, the Federal Reserve usually focuses on

Selecciona una de las siguientes respuestas posibles:

  • M1

  • M2

  • Federal Funds rate

  • the discount rate

Explicación

Pregunta 22 de 26

1

Required reserves are the percent of

Selecciona una de las siguientes respuestas posibles:

  • deposits that banks are required to hold as reserves.

  • reserves that banks are required to hold as reserves.

  • loans that banks are required to hold as reserves.

  • None of the answers is correct.

Explicación

Pregunta 23 de 26

1

Which of the following assets would you classify as being most liquid?

Selecciona una de las siguientes respuestas posibles:

  • small time deposits

  • demand deposits

  • a gold nugget

  • a home

Explicación

Pregunta 24 de 26

1

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.

Selecciona una de las siguientes respuestas posibles:

  • I only

  • I & II

  • I & III

  • I,II, & III

Explicación

Pregunta 25 de 26

1

As a result of an increase in the growth rate of money supply

Selecciona una de las siguientes respuestas posibles:

  • real GDP growth rate increases only in the short run, and the inflation rate increases in both the short run and the long run.

  • real GDP growth rate increases only in the long run, and the inflation rate increases only in the short run.

  • real GDP growth rate increases in both the short run and the long run, and the inflation rate increases only in the short run.

  • both the real growth rate and the inflation rate increase only in the short run.

Explicación

Pregunta 26 de 26

1

When the Fed conducts open market operations to decrease the monetary base, real GDP growth

Selecciona una de las siguientes respuestas posibles:

  • increases in the long run

  • decreases in the long run

  • decreases in both the short run and the long run

  • increases in both the short run and the long run

Explicación