Question
16) The money multiplier is ________ when households and banks do not deposit or lend. A) totally unaffected B) about the same C) higher D)
16) The money multiplier is ________ when households and banks do not deposit or lend.
A) totally unaffected
B) about the same
C) higher
D) lower
17) Shifts in the dollar's exchange rates affects which of the below?
A) It affects the prices of domestic and imported goods.
B) It affects the revenues of U.S. companies.
C) It affects the wealth of all investors in the country.
D) All of these
18) The Fed, in interaction with banks and other units of the economy, create ________.
A) money and employment
B) employment and credit
C) money and credit
D) employment and debt
19) An easy money policy of expanding the money supply (that is, stimulating higher growth rates for one or more monetary aggregates) may appear to promote ________, but it may also raise the prospect of inflation, affect the exchange rate disadvantageously, and increase interest rates.
A) growth and low interest rates
B) growth and high interest rates
C) stagnation and low interest rates
D) stagnation and high interest rates
20) The Fed cannot, with any of its monetary tools (open market operations, discount rates, etc.), directly influence such complex economic variables as ________.
A) the prices of goods and services
B) the unemployment rate
C) the growth in gross domestic product
D) All of these
21) Insurance companies provide insurance policies for which the policyholder pays insurance ________. Insurance companies promise to pay specified sums contingent on the occurrence of future events and thus are ________. The major part of the insurance company ________ is deciding which applications for insurance they should accept and which ones they should reject. Insurance companies have two sources of income: the initial underwriting income and the ________.
A) underwriting process; premiums; risk bearers; investment income
B) investment income; premiums; risk bearers; underwriting process
C) premiums; risk bearers; underwriting process; investment income
D) payments; risk bearers; investment process; insurance income
23) Pension funds have become important because ________.
A) income and wealth have declined steadily over the post-World War II period, leaving households less money for long-term savings.
B) people are living longer and can expect less financial needs for longer retirement periods.
C) pensions represent compensation to employees that is free of tax liability to the employee until after the workers retire and their income from employment ceases.
D) employer contributions are not tax deductible to the employer.
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