Question 12.5 pts

What is the Federal Reserves Dual Mandate?

Group of answer choices

Longest business cycles and maximum employment.

maximization of marginal revenue and minimum cost.

Maximization of both supply and demand.

Stable prices and maximum employment.

Flag question: Question 2Question 22.5 pts

What do economists mean when they use the term "Monopsony"?

Group of answer choices

In a market there is only one seller of labor, but many buyers.

In an industry there is only one business selling products.

Price is the invisible hand.

In a market there is only one buyer of labor, but many sellers.

Flag question: Question 3Question 32.5 pts

Which government officials are responsible for conducting fiscal policy?

Group of answer choices

the Supreme Court

the President and the US Congress

the Department of Defense

Congress only

Flag question: Question 4Question 42.5 pts

With regard to GDP, what are we referring to when we speak of multiple counting?

Group of answer choices

Counting the GDP of 2 economies at the same time.

We don't count both intermediate goods and final goods, since intermediate goods are in final goods..

Counting the production of 2 companies toward one economy's GDP.

When a government like China's artificially inflates its GDP..

Flag question: Question 5Question 52.5 pts

Which Federal Reserve District is the Commonwealth of Virginia in?

Group of answer choices

5th.

4th.

12th.

7th.

Flag question: Question 6Question 62.5 pts

Suppose that for the United States, Nominal GDP is$20 trillion for 2020. Assume further that the price of a market basket in 2020 is $3,200 whereas the same market basket in the year 2000 fetched a price of $2,000. If the year 2000 is the base year, what is Real GDP in 2020 (rounded to the nearest .5 trillion)?

Group of answer choices

$33.5 trillion

$20 trillion

$12.5 trillion

$12 trillion

Flag question: Question 7Question 72.5 pts

GDP can be calculated by summing:

Group of answer choices

Consumption,investment,government purchases and imports.

Consumption,investment,government purchases and net exports.

Consumption,investment,wages and rents.

Consumption,investment,government spending and imports.

Flag question: Question 8Question 82.5 pts

Which of the following is not one of the primary functions of money?

Group of answer choices

Unit of account.

Medium of exchange.

Adjustment to price / quantity equilibrium.

Store of value.

Flag question: Question 9Question 92.5 pts

The transactions demand for money is most closely related to money functioning as a?

Group of answer choices

Medium of exchange.

Unit of account.

Store of value

measure of value.

Flag question: Question 10Question 102.5 pts

In the theory of comparative advantage, a good should be produced in the nation where:

Group of answer choices

It can produce that product at a lower opportunity cost than those nations it would trade with.

the production possibilities line lies further to the right than the the other trading partners' possibilities lines.

the absolute costs in terms of real resources used is the least.

the abolute money cost of production is the lowest.

Flag question: Question 11Question 112.5 pts

Checkable deposits are:

Group of answer choices

included in M1.

not included in either M1 or M2.

considered to be a near money.

also called time deposits.

Flag question: Question 12Question 122.5 pts

If a nation has a comparative advantage in the production of technology services, this means the nation:

Group of answer choices

cannot benefit by producing and trading this product.

has a production possibilities curve identical to those of other nations.

must give up less of other goods or services than other nations to produce a unit of technology services.

is not subject to increasing opportunity costs.

Flag question: Question 13Question 132.5 pts

What is the formula for GDP per capita?

Group of answer choices

Real GDP /Population

C +Ig+ G + Xn

70 / Annual Growth Rate

MR =MC

Flag question: Question 14Question 142.5 pts

An expansionary fiscal policy is shown as a:

Group of answer choices

movement along an existing demand curve.

Rightward shift in the economy's demand curve.

leftward shift in the economy's aggregate supply curve.

leftward shift in an economy's aggregate demand curve.

Flag question: Question 15Question 152.5 pts

What is the definition of inflation?

Group of answer choices

A fall in the general level of prices.

the condition where goods are worth more in real terms than they were before.

A rise in the general level of prices.

Any time the price of a single good rises...such as gasoline.

Flag question: Question 16Question 162.5 pts

What do critics of minimum wage (including some economists) say will happen if minimum wage creates an above-equilibrium minimum wage? (Note: this happens when the market wage without a minimum wage is lower than the minimum wage.)

Group of answer choices

All existing workers are certain to have a permanent boost in their paychecks.

Many existing workers will switch to lower skilled jobs to take advantage of the minimum wage.

Many jobs will be outsourced.

Employers will simply hire fewer workers.

Flag question: Question 17Question 172.5 pts

Suppose the following expenditures were made on goods and services produced in the United States in 2020:

Consumption $11 trillion

Investment 4 trillion

Government Purchases 5 trillion

Government Transfer Payments 3 trillion

Exports 3 trillion

Imports 4 trillion

What was GDP for the year?

Group of answer choices

$21 trillion

$25 trillion

$19 trillion

$30 trillion

Flag question: Question 18Question 182.5 pts

Suppose that Julie is laid off because she works at the last automobile manufacturer in Virginia, which has just closed. Julie makes $30 per hour because of her skills in auto making. However, the closest places Julie can relocate to which require that skill are Texas, Mississippi, or Michigan. Because she takes care of her elderly mother, she cannot move. Which of the following types of unemployment is she experiencing?

Group of answer choices

Frictional unemployment

Cyclical unemployment

Structural unemployment

Demand-pull unemployment

Flag question: Question 19Question 192.5 pts

According to the slideshow about monetary policy in the Twenty-First century, which tools of monetary policy is the Fed's primary tool? (Note this answer may be different from the one in your textbook)

Group of answer choices

Targeting the Federal Funds rate

Open Market Operations

The Discount Rate

The Reserve Ratio

Flag question: Question 20Question 202.5 pts

The textbook shows this formula as the correct one for the money multiplier: 1 divided by the required reserve ratio. (1 / required reserve ratio) According to the slideshow about Monetary Policy in the Twenty-First Century, what makes this formula inaccurate as a way to calculate the amount of money creation or destruction in the current environment?

Group of answer choices

It is impossible to predict money creation or destruction in the current environment.

In the current environment, the formula should be 10/ the required reserve ratio.

The new ratio should be 1 / the Federal Funds rate.

The FED does not require banks to hold money at the FED currently (i.e. the denominator would be zero.)

Flag question: Question 21Question 2112.5 pts

Suppose there were the following expenditures on goods and services produced in the United States in 2022:

Consumption $17 trillion

Gross Investment $6 trillion

Government Purchases $8 trillion

Government Transfer Payments $5 trillion

Exports $6 trillion

Imports $7 trillion

1) Calculate GDP for 2022 and show all work.

2) Suppose the CPI rose 7% in 2022. Calculate the Real GDP in 2022 if 2021 is the base year you are comparing it to: (This will require you to divide GDP (i.e. Nominal GDP) by (1.00 + .07). (Note 1.00 = 100%) the 2021 Base CPI. (Also note that .07 = 7% for 2022 inflation. This is why you are dividing by 1.07 )

3) Indicate 1 item that is relevant to consumer well-being, but might not be included in GDP. Describe why it is relevant and why it might be missing.

(Rubric: 12.5 points - Do the calculation correctly and answer all questions correctly; 10.5 points - Do the calculation correctly and answer most questions correctly; 9 points - Calculation is not correct and some questions aren't answered properly. 7 or less points - This is a failing score for the question. The answer is worse than that required for 7 points.)

Question 22 12.5 pts

Essay Prompt: Discuss how absolute advantage and comparative advantage are different. Also, what is the US's position with both goods and services in terms of trade deficits and surpluses.

(Rubric: 12.5 points - The essay is at least 3 sentences long and answers all questions. 10 points - The essay is at least 3 sentences long, but doesn't answer all questions. 8 points - The essay is less than 3 sentences, but answers some questions. 625 or less points - This is a failing score for the question. The answer is worse than that required for 8 points.)

Question 23 12.5 pts

Suppose you are on the Federal Reserve's Open Market Committee and you receive information from the committee that inflation is higher than 2% and has been for some time. Meanwhile, unemployment is well below the US natural rate of unemployment (slightly below 4%). Describe how the slides in that slideshow you reviewed indicate that the FED would conduct monetary policy in the Twenty-First Century in this situation: Begin your answer by describing the FED's Dual Mandate.

(Rubric: 12.5 points - The essay is at least 3 sentences long and answers all questions. 10 points - The essay is at least 3 sentences long, but doesn't answer all questions. 8 points - The essay is less than 3 sentences, but answers some questions. 6.25 or less points - This is a failing score for the question. The answer is worse than that required for 150 points.)

Question 24

Suppose the following facts apply to the Land of Liam's (an economy) unemployment rate for the year 2021:

Employed 11,000,000

Unemployed 525,000

Not in the Labor Force 2,100,000

Institutionalized (incarcerated or in a care facility) 550,000

Under the legal age to be employed 550,000

Population 14,725,000

Calculate the Land of Liam's Unemployment rate and show all of your work. Describe a citizen of Land of Liam who is not included in the unemployment rate and why they are not.

(Rubric: 12.5 points - Do the calculation correctly and answer all questions correctly; 10.5 points - Do the calculation correctly and answer most questions correctly; 9 points - Calculation is not correct and some questions aren't answered properly. 7 or less points - This is a failing score for the question. The answer is worse than that required for 7 points.)