Which of the following will decrease the ability of the banking system to create money?

a	a decrease in the amount of cash people hold
b	a decrease in the reserve requirement
c	an increase in the amount of excess reserves held by banks
d	an increase in banks' willingness to make loans
e	a decrease in the discount rate

Question 22 (1 point)

If the reserve ratio is 5%, what is the maximum amount of money that could be created by a new deposit of $1,000?

a	$1,000
b	$1,020
c	$1,050
d	$10,000
e	$20,000

Question 23 (1 point)

Advances in information technology such as ATM machines have had what effect on the demand for money and the interest rate?

a	Money demand increases, Interest rate increases
b	Money demand increases, Interest rate decreases
c	Money demand decreases, Interest rate increases
d	Money demand decreases, Interest rate decreases
e	Money demand does not change, Interest rate decreases

Question 24 (1 point)

Which of the following will increase the interest rate in the market for loanable funds?

a	a decrease in the expected rate of return from investment spending
b	an increase in government budget deficits
c	an increase in the aggregate savings rate
d	a decrease in expected inflation
e	an increase in capital inflows

Question 25 (1 point)

Which of the following is true of the money supply curve?

a	It shifts to the right when the interest rate increases
b	It shifts to the left when the savings rate decreases
c	It is vertical
d	It shows a positive relationship between the interest rate and the quantity of loanable funds
e	It shifts to the left when the Federal Reserve buys Treasury bills

Question 26 (1 point)

When government borrowing increases interest rates, it is known as

a	crowding out
b	fiscal policy
c	expansionary monetary policy
d	contractionary monetary policy
e	financial regulation

Question 27 (1 point)

According to the quantity theory of money, the money supply times the velocity of money is equal to

a	nominal GDP.
b	real GDP.
c	full employment real GDP.
d	the price level.
e	a constant value.

Question 28 (1 point)

An open market sale by the Federal Reserve will lead to which of the following?

a	an increase in demand for money
b	an increase in interest rates
c	a decrease in investment demand
d	an increase in aggregate demand
e	an increase in the price level

Question 29 (1 point)

The Federal Reserve will take actions that cause the federal funds rate to rise in an attempt to

a	increase unemployment
b	increase the money supply
c	reduce inflation
d	increase real GDP
e	encourage investment

Question 30 (1 point)

An increase in the expected inflation is likely to have which of the following effects?

a	shift the long-run Phillips curve to the right
b	shift the short-run Phillips curve downward
c	increase the actual inflation rate
d	decrease the unemployment rate
e	shift the short-run aggregate supply curve to the right

Question 31 (1 point)

Which of the following policies could the Federal Reserve implement to combat inflation created by expansionary fiscal policy?

a	Lower the reserve requirement.
b	Raise the discount rate.
c	Buy Treasury securities.
d	Raise taxes.
e	Reduce government spending.

Question 32 (1 point)

Which of the following is a contractionary fiscal policy?

a	raising the reserve requirement
b	decreasing transfer payments
c	decreasing taxes
d	raising government spending
e	increasing the federal funds rate

Question 33 (1 point)

If a country currently has a positive national debt and a balanced budget, how would a decrease in taxes affect the country's deficit and debt?

a	Deficit increases, Debt increases
b	Deficit increases, Debt decreases
c	Deficit decreases, Debt increases
d	Deficit decreases, Debt decreases
e	Deficit decreases, Debt does not change

Question 34 (1 point)

A country's national debt is

a	the amount of money the country owes to foreigners.
b	the difference between the country's tax revenue and government spending in a given year.
c	the sum of the country's past deficits and surpluses.
d	always positive.
e	higher when gross domestic product is increasing.

Question 35 (1 point)

During a recession, the Federal Reserve might _____________its purchase of Treasury bills in order to ____________the Federal funds rate and __________________aggregate demand.

a	increase; decrease; increase
b	increase; decrease; decrease
c	decrease; decrease; increase
d	decrease; increase; increase
e	decrease; increase; decrease

Question 36 (1 point)

Which of the following is true of the long-run Phillips curve?

a	It shows a negative relationship between the unemployment rate and the inflation rate.
b	It shows a negative relationship between the unemployment rate and the interest rate.
c	It shifts upward when expected inflation increases.
d	It is vertical at the natural rate of unemployment.
e	It shifts to the right when the Federal Reserve pursues expansionary monetary policy.

Question 37 (1 point)

An increase in which of the following over time best describes economic growth

a	nominal GDP
b	real GDP per capita
c	nominal GDP per capita
d	the labor force
e	aggregate demand

Question 38 (1 point)

Which of the following is most likely to lead to long-run economic growth?

a	a more restrictive immigration policy
b	higher trade barriers
c	increase government funding of education
d	contractionary fiscal policy
e	negative net investment

Question 39 (1 point)

If a country's inflation rate rises, which of the following will happen to the demand for the country's currency and the value of the country's currency on the foreign exchange market?

a	Demand shifts right, Value depreciates
b	Demand shifts right, Value appreciates
c	Demand shifts left, Value appreciates
d	Demand shifts left, Value depreciates
e	Demand does not change, Value depreciates

Question 40 (1 point)

If foreign investors increase investment in the United States, what will happen to the value of the dollar in the foreign exchange market and the U.S net exports?

a	Value of the U.S dollar appreciates, U.S net exports increase
b	Value of the U.S dollar appreciates, U.S net exports decrease
c	Value of the U.S dollar depreciates, U.S net exports increase
d	Value of the U.S dollar depreciates, U.S net exports decrease
e	Value of the U.S dollar does not change, U.S net exports do not change

Saved at 10:12 pm

English

• Support
• Schoology Blog
• PRIVACY POLICY
• Terms of Use

Schoology 2020