QUESTION 8 2.273 points Save Answer Which of the following actions on the part of the Federal Reserve Bank constitute an expansionary monetary policy? O An increase in the reserve requirement. O An open market purchase of government bonds. O Increase the federal funds rate. QUESTION 9 2.273 points Save Answer A primary goal of contractionary monetary policy is to: O reduce the interest rate. increase aggregate demand. O stabilize the price level. QUESTION 10 2.273 points Save Answer In a severe national financial crisis, a central bank can stabilize the financial system by: O acting as a lender of last resort. O keeping price levels stable. O reducing unemployment. O controlling the money supply.QUESTION 19 2.273 points Save Answer The real exchange rate: expresses the value of currency in one country in terms of the same currency in another country. uses the price level in each country to convert the exchange rate into a value that is in "real" terms. is the same as nominal exchange rate. All of these statements are true. QUESTION 20 2.273 points Save Answer When the U.S. dollar drops in value: O exports tend to go up, which increases the trade deficit. exports tend to fall, which decreases the trade deficit. O exports tend to go up, which decreases the trade deficit. O exports tend to fall, which increases the trade deficit. QUESTION 21 2.273 points Save Answer When the dollar appreciates against the euro, the euro has: O become less valuable relative to all other currencies. O depreciated against the dollar. O become more valuable relative to all other currencies. appreciated against the dollar. QUESTION 22 2.273 points Save Answer If $1 is worth 10 pesos, then 1 peso is worth: $0.10. $1.10. O $0.01. $1.00.QUESTION 5 2.273 points Save Answer The amount of demand deposits that a bank must keep as vault cash or on deposit with the Fed is called: reserve ratio. reserves. O excess reserves. O required reserves. QUESTION 6 2.273 points Save Answer If the reserve requirement ratio is 5% and a bank receives $100 in new demand deposit, how much is the excess reserve and required reserve respectively? Excess reserve=$5; required reserve=$95. Excess reserve=$95;required reserve=$5. Excess reserve=$100;required reserve=$0. Excess reserve=$0;required reserve=$100. QUESTION 7 2.273 points Save Answer The discount window provides: O loans to banks at low interest rates, only when the economy is doing well. O loans to banks at low interest rates, so they can lend more money out to the public. guaranteed emergency funds for banks in trouble at a higher interest rate than others. guaranteed emergency funds for banks in trouble at a lower interest rate than others.QUESTION 1 2.273 points Save Answer Fiat money is: O any form of money that can be legally exchanged into a fixed amount of an underlying commodity. O money used for the exchange of large commodities. money created by rule. O None of these is true. QUESTION 2 2.273 points Save Answer Holding money is: O nearly always the most convenient way to hold onto wealth over time. rarely the most convenient way to hold onto wealth over time. almost never the most convenient way to hold onto wealth over time. O sometimes the most convenient way to hold onto wealth over time. QUESTION 3 2.273 points Save Answer If the reserve ratio is 5 percent, then the money multiplier is approximated to be: O 10. O 5. O2. O 20. QUESTION 4 2.273 points Save Answer The cash you have in your wallet would be counted in which measure of money? O Hard money O M2 O M1 O It would be counted in all of these2.273 points Save Answer QUESTION 37 Refer to the data in the table, which provides hypothetical consumer price index (CPI) data for country Signifia. Calculate inflation rate for 2005 using the year-to-year formula described in the slide posted in blackboard. Table 1 Year CPI (1995=100) 2001 124 2004 145 2005 150 2010 172 O 3.3% O 3.4% O 3.5% O 3.7% 2.273 points Save Answer QUESTION 38 Refer to the data in the table, which provides hypothetical consumer price index (CPI) data for country Signifia. Calculate average inflation rate between 2001 and 2010 using the overlapping years formula described in the slide posted in blackboard. Year CPI 2001 124 2004 145 2005 150 2010 172 3.3% 3.4% O 3.5% O 3.7%QUESTION 30 2.273 points Save Answer Productivity is generally measured as: O real output over time. nominal output over time. output per year. O output per worker. QUESTION 31 2.273 points Save Answer The productivity of workers can depend on which of the following? O Physical capital Human capital Technology All of these are determinants of productivity. QUESTION 32 2.273 points Save Answer The rule of 70 estimates how long it will take a country to double its real GDP per capita by: O dividing the average growth rate by 70. O multiplying the average growth rate by 70 percent. O dividing the current real GDP per capita by 70. O dividing 70 by the average growth rate. QUESTION 33 2.273 points Save Answer A dollar: has no worth itself, but represents goods we can buy with it. can reflect the cost of living in terms of the goods it can purchase. changes in value over time. O All of these statements are true.QUESTION 39 2.273 points Save Answer Social Security checks began to be issued in: O 1920. 1950. 1930. O 1940. QUESTION 40 2.273 points Save Answer Social Security payments: O are adjusted using COLAs. O began to be indexed to inflation in 1975. are now indexed using the CPI. All of these statements are true. QUESTION 41 2.273 points Save Answer The consumer price index: O helps us understand how the cost of living today compares with the cost of living at some time in the past. measures the increase in the cost of the market basket relative to the cost in a given base year. is always 100 in the base year. O All of these statements are true. QUESTION 42 2.273 points Save Answer The inflation rate is: O one of the central concepts in macroeconomics. the percentage change in the overall price level. O a measure of the rate of increase in the cost of living. All of these statements are true.QUESTION 15 2.273 points Save Answer The twin responsibilities of the Federal Reserve is called the: O two tasks dual mandate. double duty. O twin spin. QUESTION 16 2.273 points Save Answer Which measure of money would we most likely use if we were interested in looking at spending in the economy? O Hard money O M2 O M1 We would not use any of these QUESTION 17 2.273 points Save Answer Which of the following tools is used most often by the Fed for changing the supply of money? O Interest rate Reserve requirement O Open market operations Discount window QUESTION 18 2.273 points Save Answer The exchange rate is the: O price of one currency expressed in terms of another currency. reciprocal of the currency's real value. O price of one currency expressed in terms of the goods and services it can buy.QUESTION 43 2.273 points Save Answer Which of the following price index does include prices of imports? Consumer price index. O GDP deflator. Producer price index. QUESTION 44 2.273 points Save Answer Which of the following price index does not include prices of imports? Consumer price index. O GDP deflator. Producer price index.QUESTION 26 2.273 points Save Answer An example of physical capital is: a piece of land. a financial software installed in a computer. a computer. All of the items are examples of physical capital. QUESTION 27 2.273 points Save Answer Human capital is acquired through: O training. education. job experience. O All of these are ways to acquire human capital. QUESTION 28 2.273 points Save Answer Human capital refers to: O the work experience that determines the productivity of workers. O the natural talent that determines the productivity of workers. O the skills that determine the productivity of workers. O All of these describe a facet of human capital. QUESTION 29 2.273 points Save Answer If the base year's nominal GDP is 200 and current year's real GDP is 210. Then the economic growth in current year is equal to O 0% O 2% O 5% 10%QUESTION 11 2.273 points Save Answer Open market operations refer to: O the buying and selling government securities in the open market by the Fed. O the short-term rate loans that the Fed makes to banks. the ability to change the amount that banks must hold on reserve. QUESTION 12 2.273 points Save Answer The chairman of the Federal Reserve: is appointed by the President and confirmed by Senate for a four-year term. has significant direct control over the conduct of monetary policy by the central bank. O is one of the most important economic positions in the United States, if not the world. O All of these are true. QUESTION 13 2.273 points Save Answer How many regional Federal Reserve are there in the United States? O 10 O 12 O 14 O 15 QUESTION 14 2.273 points Save Answer One of the functions of money is to serve as a: O valuation tool. equality enhancer. O store of value. O All of these are functions of money.QUESTION 34 2.273 points Save Answer A market basket: includes specific goods and services in fixed quantities that roughly correspond to a typical consumer's spending. O looks like a really long shopping list. O includes housing, food, clothing, and transportation. O All of these statements are true. QUESTION 35 2.273 points Save Answer A price index: O summarizes the changes in the cost of living. O allows us to see clearly the changes in the cost of a market basket over time or across different locations. measures how much the cost of a market basket has risen or fallen relative to the cost in a base time period or location. All of these statements are true. QUESTION 36 2.273 points Save Answer In 1976, the cost of a movie was $4. In 2012, it's $9. If the CPI for 1976 is 56, and 228 for 2012. How much is the cost of a 1976 movie in 2012? O $2.21. $2.21. $16.29. $10.29.QUESTION 23 2.273 points Save Answer A U.S. importer is planning to buy 1 million pounds (Ibs) of avocado from Mexico. Suppose, the price of avocado per lbs is 10 pesos (inclusive of shipping costs) in Mexico. Based on current exchange rate 18.60 pesos=$1 or 1 peso = $0.05, how much is the cost of 1 million pounds of imported avocado in U.S. dollar? $1 millions. $10 millions. $500,000. $5 millions. QUESTION 24 2.273 points Save Answer Which of the following would lead to economic growth? improvement in technology. repairing a old car. increase in personal expenses. All of these are important to economic growth. QUESTION 25 2.273 points Save Answer An example of human capital would be: O Excel software. an office chair. a training session on Excel. O All of these are examples of human capital