ECONOMICS

61.During the recessionary phase of a business

cycle

a. The purchasing power of money is likely to

decline rapidly.

b. The natural rate of unemployment will increase

dramatically.

c. Potential national income will exceed actual

national

income.

d. Actual national income will exceed potential

national

income.

62.For a given level of tax collections, prices, and

interest rates, a decrease in governmental

purchases will result in a(n)

a. Increase in aggregate demand.

b. Increase in aggregate supply.

c. Decrease in aggregate demand.

d. Decrease in aggregate supply.

63.In national income terms, aggregate demand

is the

a. Demand for money by the community in a

period of full employment.

b. Total expenditure on capital goods by

entrepreneurs during a period of full employment.

c. Demand that is needed if a country's economy

is to operate at optimum level and the level of

investment is to be raised.

d. Total expenditures on consumer goods and

investment, including government and foreign

expenditures, during a given period.

*64.Which one of the following would not be

included in the computation in gross domestic

product (GDP)?

a. Purchase of a new home.

b. An automotive worker's wages.

c. A doctor's fee.

d. Purchase of common stock.

65. An upturn in economic activity is indicated by

all of the following, except

a. Increased housing starts.

b. Reduction in the quantity of unemployment

claims.

c. Increase in personal travel.

d. Reduction in the amount of luxury purchases.

66. Which of the following may provide a leading

indicator of a future increase in gross domestic

product

a. A reduction in the money supply.

b. A decrease in the issuance of building permits.

c. An increase in the timeliness of delivery by

vendors.

d. An increase in the average hours worked per

week of production workers.

67.Disposable income is calculated as

a. Gross domestic product minus the capital cost

allowance.

b. Net domestic product minus indirect business

taxes plus net income earned abroad.

c. Personal income minus transfer payments.

d. Personal income minus personal taxes.

68.The primary reason for allowing legal

immigration into industrial nations is the

immigrants' potential for

a. Reducing a trade deficit.

b. Fulfilling a trade agreement.

c. Contributing to economic growth.

d. Fulfilling a political agreement.

69.Some economic indicators lead the economy

into a recovery or recession, and some lag it. An

example of a lagging indicator is

a. Chronic unemployment.

b. Orders for consumer and producer goods.

c. Housing starts.

d. Consumer expectations.

70.Government borrowing to finance large deficits

increases the demand for lendable funds and

a. Increases the supply of lendable funds.

b. Exerts downward pressure on interest rates.

c. Has no impact on interest rates.

d. Puts upward pressure on interest rates.

Economic Measures and Policy

71.A period of rising inflation

a. Increases the price level, which benefits those

who are entitled to receive specific amounts of

money.

b. Enhances the positive relationship between the

price level and the purchasing power of money.

c. Will not be affected by contracts that include

the indexing of payments.

d. Increases the price level, which is negatively

related to the purchasing power of money.

72.The most effective fiscal policy program to help

reduce demand-pull inflation would be to

a. Decrease the rate of growth of the money

supply.

b. Increase both taxes and government spending.

c. Decrease taxes and increase government

spending.

d. Increase taxes and decrease government

spending.

73. The money supply in a nation's economy will

decrease following

a. Open-market purchases by the nation's central

bank.

b. A decrease in the discount rate.

c. An increase in the reserve ratio.

d. A decrease in the margin requirement.

74.The Federal Reserve Board most directly

influences a corporation's decision of whether or

not to issue debt or equity financing when it

revises the

a. Corporate income tax rate.

b. Prime rate at which the Federal Reserve Bank

lends money to member banks.

c. Discount rate at which the Federal Reserve

Bank lends money to member banks.

d. Discount rate at which member banks lend

money to their customers.

75.According to fiscal policy principles, a tax

increase will

a. Increase spending and increase aggregate

demand.

b. Increase spending and reduce aggregate

demand.

c. Reduce spending and increase aggregate

demand.6

d. Reduce spending and reduce aggregate

demand.

ANSWER ALL CORRECTLY OR ELSE DISLIKE. ASAAAAAP!!!!