Test
Practice Econ 3
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Preguntas del test (26)
1If, in the best case scenario, increased government spending were used to revive the economy from a recession, the increased spending would
- Abe offset by a decrease in inflation
- Bbe a little more than the fall in consumer confidence in order to help make up for lost GDP
- Cnot need to be as large as the fall in consumer consumption
- Dbe exactly the same as the fall in consumer consumption.
2In what way are monetary and fiscal policies similar?
- AThey both involve borrowing from the public
- BThey are both somewhat ineffective when it comes to combating real shocks
- CThey both target the aggregate demand curve to combat the business cycle
- DAll of these answers are correct
3Mistimed contractionary fiscal policy can cause
- Aa recession
- Binflation
- Ca real shock
- Drising interest rates
4Government spending becomes a more effective policy tool when
- Aconsumers are too pessimistic and not spending
- Binterest rates in the economy are rising simultaneously
- Cthe government raises taxes to finance spending
- D the economy is above the Solow growth curve
5An increase in government spending growth will cause inflation to fall in
- Athe short run
- Bthe long run
- Cboth the short run and the long run
- Dneither the short run nor the long run
6An increase in government spending growth will cause the AD curve to
- Ashift outward
- Bshift inward
- Cshift outward and then inward
- Dremain unchanged
7If 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
- A1,2
- B2,3
- C2 only
- Dnone of the options
- E1,2,3
8The largest component of GDP is
- Aconsumption
- Binvestment
- Cgovernment spending
- Dimports
9When consumers reduce spending, the reduction in velocity of money is split between
- Adecrease in inflation and decrease growth
- Bdecrease in inflation and increase in growth
- Cdecrease in the money supply and decrease in inflation
- Ddecrease in the money supply and decrease in growth
10Examples of expansionary fiscal policy include increases
I. in government spending.
II. in income taxes.
III. of the money supply- AI only
- BI & II
- CII only
- DII & III
11Fiscal policy is well-suited to counteract a recession or depression when
- Aunemployment is low.
- Btaxes are high.
- Ca real negative shock occurs.
- Dresources are under utilized.
12A decrease in consumption growth will cause aggregate demand to
- Ashift inward
- Bshift outward
- Cremain unchanged
- Dshift inward and then outward
13In a typical year, changes in government spending compared to overall spending are relatively
- Asmall
- Blarge
- Cunpredictable
- Dwell-timed
14Which would be the most liquid?
- ASmall time deposits
- Bsmall cut diamonds
- CMonet oil painting
- Dmoney market mutual funds
15When the Federal Reserve makes an open market purchase, the reserves of the banking system will
- Aincrease
- Bdecrease
- Cremain constant
- Dbe too difficult to predict
16What part of the money pyramid does the Fed have direct control over?
- Athe monetary base
- BM1
- CM1 plus the monetary base
- DM2
17An increase in money growth will cause inflation to increase in
- Athe long run
- Bthe short run
- Cthe long run and the short run
- Dneither the long run nor the short run
18The members of the Board of Governors of the Federal Reserve have 14-year non-renewable terms. Thus,
- Athey are somewhat insulated from the political process.
- Bthe chairman of the board of governors also has a 14-year term.
- Cevery president of a federal reserve district bank will serve at least 14 years on the BOG.
- Dthe New York Federal Reserve District Bank President can only serve 14 years on the FOMC.
19If the Fed buys government bonds, then all of the following will likely increase except
- AM1
- Bbank reserves
- Cthe monetary base
- DFederal Funds rate
20When the Federal Reserve buys bonds, the supply curve for bond
- Ashifts inward
- Bshifts outward
- Csometimes shifts inward, sometimes outward
- Dremains unchanged
21When the Federal Reserve conducts monetary policy, the Federal Reserve usually focuses on
- AM1
- BM2
- CFederal Funds rate
- Dthe discount rate
22Required reserves are the percent of
- Adeposits that banks are required to hold as reserves.
- Breserves that banks are required to hold as reserves.
- C loans that banks are required to hold as reserves.
- D None of the answers is correct.
23Which of the following assets would you classify as being most liquid?
- Asmall time deposits
- Bdemand deposits
- Ca gold nugget
- Da home
24Which 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.- AI only
- BI & II
- CI & III
- DI,II, & III
25As a result of an increase in the growth rate of money supply
- A real GDP growth rate increases only in the short run, and the inflation rate increases in both the short run and the long run.
- Breal GDP growth rate increases only in the long run, and the inflation rate increases only in the short run.
- Creal GDP growth rate increases in both the short run and the long run, and the inflation rate increases only in the short run.
- D both the real growth rate and the inflation rate increase only in the short run.
26When the Fed conducts open market operations to decrease the monetary base, real GDP growth
- Aincreases in the long run
- Bdecreases in the long run
- Cdecreases in both the short run and the long run
- Dincreases in both the short run and the long run
Información
- Descripción
- Econ 101 Test sobre Practice Econ 3, creado por mjheg el 05/05/2013.
- Autor
- mjheg
- Idioma
- English
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