Which of the following regarding the federal funds market is NOT true?

• The federal funds market developed to help banks meet their reserves requirements at the end of the day.
• Transactions influence the amount of money that banks have on hand to meet the reserve requirement at the end of the day.
• The Fed directly controls the federal funds rate.
• FOMC meetings set a target for the federal funds rate.

The president gives his annual State of the Union speech on television and discusses the loss of manufacturing jobs to China and the need for the United States to create more jobs in order to make up for this.

This describes which of the following types of unemployment?

• Structural
• Cyclical
• Frictional
• Seasonal

Select the statement below that is FALSE about the Federal Reserve.

• There are 12 regional banks that are part of the Federal Reserve.
• It authorizes banks to print money.
• It lets banks keep some of their reserves at regional branches.
• It helps banks clear checks from other banks.

Which of the following would be true of policies taken during times of BOTH high and low unemployment?

• Increasing government spending will stimulate the economy.
• Reducing the money supply will reduce inflation.
• Cutting taxes will cause an increase in GDP.
• The multiplier effect will magnify the influence of policies.

Select the statement below that is true for BOTH supply AND demand.

• Considers the economy from the producer's point of view
• Usually depicted as an upward sloping curve
• Considers the economy from the consumer's point of view
• Considers price and quantity combinations, with everything else held constant

What happens during abank run?

• Depositors increase their accounts due to high-interest rates.
• Banks lower interest rates to encourage loans to households and businesses.
• Many depositors demand their funds to be repaid.
• Creditors demand their accounts to be settled with banks.

Which of the following describes one of the unexpected benefits of China's economic policies?

• The GDP of the United States increased, and the GDP of China decreased.
• U.S. exports to China increased.
• The standard of living in the United States increased.
• The Chinese central bank printed extra currency to exchange with the United States.

Which of the following policy types can promote growth when the economy is showing signs of slowing?

• Neither
• Fiscal policy
• Monetary policy
• Both

Which statement below about economics is false?

• Economics is part of the humanities because it studies human decision-making.
• Microeconomics studies decision-making at the individual level.
• Macroeconomics studies the application of economics across an economy.
• Most questions about economics address the central banking system and financial economics.

Which of the following describes theProducer Price Index?

• What the Conference Board uses to assess economic growth
• An evaluation of crude, intermediate and finished goods
• A popular economic indicator despite its statistical issues
• A strong indicator of economic growth but not wealth distribution

Which statement below best describes what will most likely happen, from an economic standpoint, when a music group with growing popularity goes on tour and sells out a certain venue in hours with tickets for $25 apiece?

• Nothing changes, since the market is already clearing.
• The group will add more performance dates with tickets at a lower cost.
• The group will cancel the concert and give everyone a refund.
• The price of tickets for future concert dates will rise until it hits equilibrium.

If the market price of a product happens to be at equilibrium, which of the following will happen next?

• The price will decrease and consumers will purchase more.
• The price will increase and consumers will purchase less of that item.
• Surplus will be created.
• Nothing will happen since the market is already clearing.

Determine which statement below regarding international trade is FALSE.

• An increase in imports will cause a rightward shift in AD.
• Trade surplus occurs when exports exceed imports.
• A recession in one country can have a negative effect on AD in another country.
• If the dollar is weak, people in other countries will purchase more U.S. products.

Which statement below is false regarding the circular flow diagram?

• It is a simple model that gives a big picture view of economic activity.
• A household is an initial holder of resources in an economy.
• It is a common misconception that the circular flow diagram and GDP are related.
• It depicts interaction between the three main parties in the economy.

If the demand curve is more elastic than the supply curve, and a tax is imposed,which of the following will happen?

• A shortage will be created.
• The consumer will bear more of the burden of the tax.
• The price will rise by the amount of the tax.
• The seller will bear more of the burden of the tax.

Which of the following is true about a fractional reserve banking system?

• The central bank does not allow for this type of system.
• It is likely to fail as most people demand all of their money each day.
• There are no regulations concerning the portion of reserves banks must hold.
• It allows banks to loan out a portion of deposits and therefore create money.

Select the statement below that is true of only GNP.

• This is known as a lagging indicator.
• This does not measure domestic investment in foreign countries.
• This includes production by people outside of a country's borders.
• This is not a true quality-of-life indicator, but does indicate consumption.

Select the statement below that is true of ONLY capital account.

• This is part of the balance of payments.
• This includes traded goods, services and income.
• Investment and financing flows are part of this.
• This is the sum of the balance of trade.

In which of the following ways does deflation create problems for the economy?

• It can destroy the value of the currency.
• The decline in prices can increase the real value of debt.
• It can force people to revert back to a barter economy.
• Unstable prices discourage people from holding onto money.

Which of the following definitions corresponds to economic growth?

• The cost of money
• The quantity of one type of money that corresponds to another
• Percent change in value of the sum of a country's goods and services
• The difference between tax revenue and government expenditures

Select the equation below that corresponds to income that can be consumed, saved or paid as taxes.

• Y=C+S+T+M
• X=M
• X
• Y=C+I+G+X

Which statement below is true about aggregate demand?

• In the long run, it is indicated by a vertical line.
• It represents the amount the economy can produce at different price levels.
• It slopes upward due to the interest rate effect.
• It slopes downward due to wealth efffect.

Which answer below is NOT one of the goals of monetary policy?

• To promote stable prices
• Tochange levels of government spending and taxation
• To avoid extremes of inflation and deflation
• To promote the maximum sustainable level of employment