economics question 6

eriisp

file_6.doc

Home >Business & Finance homework help >Economics homework help >economics question 6

5.2

The public debt is the:

image1.wmf

A) Amount of U.S. paper currency in circulation

image2.wmf

B) Ratio of all past deficits to all past surpluses

image3.wmf

C) Total of all past deficits minus all past surpluses

image4.wmf

D) Difference between current government expenditures and revenues

11.

Which is an important problem associated with the public debt?

image5.png

image6.wmf

A) Payments of interest on the debt lead to greater income equality

image7.wmf

B) Interest payments on the debt tend to improve economic incentives to work and produce more unemployment

image8.wmf

C) Government borrowing to finance the debt may increase the level of private investment

image9.wmf

D) Payment of interest on the debt held by foreigners transfers real resources to other countries

5.3

Which of the following is an example of representative money?

image10.png

image11.wmf

A) an IOU note

image12.wmf

B) diamonds

image13.wmf

C) gold earrings

image14.wmf

D) a fur coat

Which is the definition of liquidity?

image15.png

image16.wmf

A) Liquidity is the rate of return on assets held in banks

image17.wmf

B) Liquidity is the tax rate applied to the earnings from assets held in banks

image18.wmf

C) Liquidity is the ease with which financial assets can be converted into money

image19.wmf

D) Liquidity is the profit margin banks can earn on demand deposits

image20.png

When money specifies the value of something, what function does it serve?

image21.png

image22.wmf

A) medium of exchange

image23.wmf

B) store of value

image24.wmf

C) unit of measurement

image25.wmf

D) standard of payment

image26.png

What function does money serve when you trade it for some good or service?

image27.png

image28.wmf

A) medium of exchange

image29.wmf

B) unit of measurement

image30.wmf

C) store of value

image31.wmf

D) standard of payment

image32.png

Match the statement to the definition that fits the best.

A. Johnny washes Mrs. Smith’s car. She offers to pay Johnny with cookies but Johnny prefers cash.

B. Johnny puts the money he earns from washing cars under his mattress. He will spend it later.

C. Johnny has $30. He knows he can either buy one pair of jeans or two CDs with that money.

image33.wmf

Measure of Value

image34.wmf

Medium of Exchange

image35.wmf

Store of Value

Incomplete Submission

image36.png

You did not answer the following questions:

Click Ok to answer these questions.

Upload files

image37.png

Incomplete Submission

image38.png

You did not answer the following questions:

Click Ok to submit the assessment or Cancel to answer these questions.

Answers Saved

image39.png

Your answers will be saved, but the assessment will not be submitted. Click Ok to finish the assessment later or Cancel to continue taking the assessment.

Error

image40.png

The following error occurred:

Time warning

image41.png

You have minute(s) remaining for this question set.

Error

image42.png

The following error occurred while submitting your answers:

Please correct the problem and try submitting again.

Time expired

image43.png

Your time has expired. Submit the assessment now or you may be penalized.

Your time has expired. The assessment will be automatically submitted.

Time warning

image44.png

You have minute(s) remaining.

Time expired

image45.png

Your time for this question set has expired. Proceed to the next question set or submit the assessment now or you may be penalized.

Your time for this question set has expired. You will automatically move to the next question set.

Your time for the last question set has expired. The assessment will be automatically submitted.

image46.png

image47.png

image48.png

image49.wmf

image50.png

image51.png

image52.png

image53.png

image54.png

image55.png

image56.png

image57.png

image58.png

Top of Form

image59.wmf

/wEPDwULLTEw

image60.png

image61.png

image62.png

Maximum number of choices allowed is {0}.

image63.png

image64.png

image65.png

image66.png

image67.png

image68.png

image69.png

image70.wmf

HTMLCONTROL Forms.HTML:Hidden.1

image71.wmf

HTMLCONTROL Forms.HTML:Hidden.1

image72.wmf

/wEWFgL48/6IBA

image73.png

image74.wmf

false

image75.wmf

If the Required Reserve Ratio is 20%, and a bank receives a $1,000 dollars, they would have to keep this amount in reserve, not to be loaned out.

image76.wmf

A) $1,000

image77.wmf

B) $800

image78.wmf

C) $600

image79.wmf

D) $200

image80.wmf

E) None of it

image81.png

If the Required Reserve Ratio is 20%, and a bank receives a $1,000 dollars, they would loan out this amount.

image82.wmf

A) $1,000

image83.wmf

B) $800

image84.wmf

C) $600

image85.wmf

D) $200

image86.wmf

E) None of it

image87.png

The name for the amount of reserves banks can loan out is

image88.wmf

A) Required Reserves

image89.wmf

B) Additional Reserves

image90.wmf

C) Private Reserves

image91.wmf

D) Excess Reserves

image92.wmf

E) Minimum Reserves

image93.png

The maximum amount of dollars that can be created from a $1,000 through the fractional reserve system with a required reserve ratio of 20% is

image94.wmf

A) $2,000

image95.wmf

B) $5,000

image96.wmf

C) $8,000

image97.wmf

D) $10,000

image98.wmf

E) No limit applies

image99.png

Which of the following Required Reserve Ratios would allow for the fractional Reserve System to create the greatest amount of money?

image100.wmf

A) 10%

image101.wmf

B) 20%

image102.wmf

C) 50%

image103.wmf

D) 75%

image104.wmf

E) 100%

5.4

When a commercial bank has “excess reserves:

image105.png

image106.wmf

A) it is in a position to make additional loans

image107.wmf

B) its actual reserves are less than its required reserves

image108.wmf

C) it is charging too high an interest rate on its loans

image109.wmf

D) its reserves exceed its assets

image110.wmf

E) the supply of its loans exceeds the demand for its loans

image111.png

Which of the following is correct?

image112.png

image113.wmf

A) The Federal Reserve has 14 regional banks. The Board of Governors has 12 members who serve 7 year terms.

image114.wmf

B) The Federal Reserve has 12 regional banks. The Board of Governors has 7 members who serve 14-year terms.

image115.wmf

C) The Federal Reserve has 12 regional banks. The Board of Governors has 14 members who serve 7-year terms.

image116.wmf

D) None of the above is correct.

image117.png

When the Fed wants to change the money supply, it most frequently

image118.png

image119.wmf

A) conducts open market operations.

image120.wmf

B) changes the discount rate.

image121.wmf

C) changes the reserve requirement.

image122.wmf

D) issues Federal Reserve notes.

Under a fractional reserve banking system, banks

image123.png

image124.wmf

A) hold more reserves than deposits.

image125.wmf

B) generally lend out a majority of the funds deposited.

image126.wmf

C) cause the money supply to fall by lending out reserves.

image127.wmf

D) All of the above are correct.

image128.wmf

If a bank has $100 in demand deposits and the reserve requirement is 20%, the amount of the Required Reserves is is __________, and excess reserves ____________?

image129.wmf

A) %100, $0

image130.wmf

B) $80, $20

image131.wmf

C) $0, $100

image132.wmf

D) $20, $80

image133.wmf

E) Impossible to determine

image134.png

If the FED wanted bank reserves to increase (that is, encourage creation of money), it could do which of the following with the corresponding tools:__________the reserve requirement _________the discount rate__________ government securities or bonds

image135.wmf

A) raise, lower, sell

image136.wmf

B) lower, lower, buy

image137.wmf

C) raise, raise, buy

image138.wmf

D) raise, lower, buy

image139.wmf

E) lower, lower, sell

image140.png

If the FED wanted bank reserves to decrease (that is, to discourage creation of money), it could do which of the following with the corresponding tools: __________the reserve requirement_________the discount rate__________ government securities or bonds

image141.wmf

A) raise, raise, sell

image142.wmf

B) lower, raise, sell

image143.wmf

C) raise, lower, buy

image144.wmf

D) lower, lower, buy

image145.wmf

E) raise, raise, buy

image146.png

If the FED sells bonds, the public holds _________ money, and the money supply is _______________________.

image147.wmf

A) less, higher

image148.wmf

B) more, higher

image149.wmf

C) less, lower

image150.wmf

D) more, lower

image151.png

If the FED buys bonds, the public holds _________ money, and the money supply is ________________________.

image152.wmf

A) less, higher

image153.wmf

B) more, higher

image154.wmf

C) less, lower

image155.wmf

D) more, lower

image156.png

Lowering the discount rate makes borrowing __________attractive to banks and may result in a(n) ___________________ in the money supply.

image157.wmf

A) less, increase

image158.wmf

B) more, increase

image159.wmf

C) less, decrease

image160.wmf

D) more, decrease

image161.png

Raising the discount rate makes borrowing _________ attractive to banks and may result in a(n) ___________________ in the money supply.

image162.wmf

A) less, increase

image163.wmf

B) more, increase

image164.wmf

C) less, decrease

image165.wmf

D) more, decrease

Which list contains only actions that increase the money supply?

image166.png

image167.wmf

A) raise the discount rate, make open market purchases
image168.wmf
B) raise the discount rate, make open market sales
image169.wmf
C) lower the discount rate, make open market purchases
image170.wmf
D) lower the discount rate, make open market sales

image171.png

Which list contains only actions that decrease the money supply?

image172.png

image173.wmf

A) raise the discount rate, raise the reserve requirement ratio
image174.wmf
B) raise the discount rate, lower the reserve requirement ratio
image175.wmf
C) lower the discount rate, raise the reserve requirement ratio
image176.wmf
D) lower the discount rate, lower the reserve requirement ratio

image177.png

Which of the following lists ranks the Fed’s monetary policy tools from most to least frequently used?

image178.png

image179.wmf

A) discount rate changes, reserve requirement changes, open market transactions
image180.wmf
B) reserve requirement changes, open market transactions, discount rate changes
image181.wmf
C) open market transactions, discount rate changes, reserve requirement changes
image182.wmf
D) None of the above lists ranks the tools correctly.

image183.png

Which of the following is not a tool of monetary policy?

image184.png

image185.wmf

A) open market operations
image186.wmf
B) reserve requirements
image187.wmf
C) the prime rate
image188.wmf
D) the discount rate

image189.png

To increase the money supply, the Fed could

image190.png

image191.wmf

A) sell government bonds.
image192.wmf
B) increase the discount rate.
image193.wmf
C) decrease the reserve requirement.
image194.wmf
D) Both a and c are correct.

image195.png

To decrease the money supply, the Fed could

image196.png

image197.wmf

A) sell government bonds.
image198.wmf
B) increase the discount rate.
image199.wmf
C) increase the reserve requirement.
image200.wmf
D) All of the above are correct.

image201.png

Reserve requirements are regulations concerning

image202.png

image203.wmf

A) the amount of deposits banks are allowed to accept.
image204.wmf
B) the amount of reserves banks must hold against deposits.
image205.wmf
C) the types of loans banks are allowed to make.
image206.wmf
D) the interest rate at which banks can borrow from the Fed.

image207.png

When the Fed increases the discount rate, banks will borrow

image208.png

image209.wmf

A) more, banks will lend more, and the money supply will increase.
image210.wmf
B) more, banks will lend less, and the money supply will decrease.
image211.wmf
C) less, banks will lend more, and the money supply will decrease.
image212.wmf
D) less, banks will lend less, and the money supply will decrease.

image213.png

The discount rate is

image214.png

image215.wmf

A) the interest rate the Fed charges banks.
image216.wmf
B) one divided by the reserve ratio.
image217.wmf
C) the interest rate banks receive on reserve deposits with the Fed.
image218.wmf
D) the interest rate that banks charge on loans to their best customers.

image219.png

10.

When the Fed buys government bonds, the reserves of the banking system

image220.png

image221.wmf

A) increase, shifting the money supply curve to the right.
image222.wmf
B) increase, shifting the money supply curve to the left.
image223.wmf
C) decrease, shifting the money supply curve to the right.
image224.wmf
D) decrease, shifting the money supply curve to the left.

image225.png

11.

Which of the following shifts aggregate demand to the right?

image226.png

image227.wmf

A) an increase in the price level.
image228.wmf
B) an increase in the money supply.
image229.wmf
C) a decrease in the price level.
image230.wmf
D) a decrease in the money supply.

image231.png

12.

If the Fed conducts open-market sales, the money supply

image232.png

image233.wmf

A) increases and aggregate demand shifts right.
image234.wmf
B) increases and aggregate demand shifts left.
image235.wmf
C) decreases and aggregate demand shifts right.
image236.wmf
D) decreases and aggregate demand shifts left.

image237.png

What is the opportunity cost for America to make 1 bulldozer instead of cars?

image238.wmf

A) 1 car

image239.wmf

B) 2 cars

image240.wmf

C) 1/2 car

image241.png

What is the opportunity cost for Japan to make 1 bulldozer instead ofcars?

image242.wmf

A) 1 car

image243.wmf

B) 1/3 car

image244.wmf

C) 3 cars

image245.png

10.

Which country has the lower opportunity cost in making bulldozers?

image246.wmf

A) Japan

image247.wmf

B) America

image248.wmf

C) neither

image249.png

11.

Who has the absolute advantage in making cars?

image250.wmf

A) Japan

image251.wmf

B) America

image252.wmf

C) neither

image253.png

12.

What is the opportunity cost for Japan making 1 car?

image254.wmf

A) 1 bulldozer

image255.wmf

B) 3 bulldozers

image256.wmf

C) 1/3 of a bulldozer

image257.png

13.

Who has the comparative advantage in making bulldozers?

image258.wmf

A) Japan

image259.wmf

B) America

image260.wmf

C) neither

Bottom of Form

economics question 6

_1404503893.unknown

_1404504637.unknown

_1404504653.unknown

_1404504662.unknown

_1404504840.unknown

_1404504844.unknown

_1404504847.unknown

_1404504848.unknown

_1404504846.unknown

_1404504842.unknown

_1404504843.unknown

_1404504841.unknown

_1404504832.unknown

_1404504836.unknown

_1404504838.unknown

_1404504839.unknown

_1404504837.unknown

_1404504834.unknown

_1404504835.unknown

_1404504833.unknown

_1404504666.unknown

_1404504668.unknown

_1404504830.unknown

_1404504831.unknown

_1404504669.unknown

_1404504667.unknown

_1404504664.unknown

_1404504665.unknown

_1404504663.unknown

_1404504658.unknown

_1404504660.unknown

_1404504661.unknown

_1404504659.unknown

_1404504655.unknown

_1404504656.unknown

_1404504654.unknown

_1404504645.unknown

_1404504649.unknown

_1404504651.unknown

_1404504652.unknown

_1404504650.unknown

_1404504647.unknown

_1404504648.unknown

_1404504646.unknown

_1404504641.unknown

_1404504643.unknown

_1404504644.unknown

_1404504642.unknown

_1404504639.unknown

_1404504640.unknown

_1404504638.unknown

_1404504141.unknown

_1404504149.unknown

_1404504629.unknown

_1404504633.unknown

_1404504635.unknown

_1404504636.unknown

_1404504634.unknown

_1404504631.unknown

_1404504632.unknown

_1404504630.unknown

_1404504153.unknown

_1404504625.unknown

_1404504627.unknown

_1404504628.unknown

_1404504626.unknown

_1404504155.unknown

_1404504623.unknown

_1404504624.unknown

_1404504621.unknown

_1404504622.unknown

_1404504156.unknown

_1404504154.unknown

_1404504151.unknown

_1404504152.unknown

_1404504150.unknown

_1404504145.unknown

_1404504147.unknown

_1404504148.unknown