|Question 20. 20. (TCO 6) If people expected that a tax cut was temporary, then this fiscal policy’s effect on the economy will tend to be (Points : 4)|
the exact opposite of what was intended.
as the multiplier effect would predict.
|1. (TCO 5) An increase in aggregate demand is most likely to be caused by a decrease in (Points : 4)|
the wealth of consumers.
consumer and business confidence.
expected returns on investment.
the tax rates on household income.
|Question 2. 2. (TCO 5) The long-run aggregate supply curve is (Points : 4)|
upward-sloping and becomes steeper at output levels above the full-employment output.
upward-sloping and becomes flatter at output levels above the full-employment output.
|Question 3. 3. (TCO 5) If the price of crude oil decreases, then this event would most likely (Points : 4)|
decrease aggregate supply in the U.S.
increase aggregate supply in the U.S.
increase aggregate demand in the U.S.
decrease aggregate demand in the U.S.
|Question 4. 4. (TCO 5) Disinflation refers to a situation where (Points : 4)|
price level falls, but the rate of inflation does not.
Price level rises, but the rate of inflation does not.
the rate of inflation falls, but the price level does not.
the rate of inflation rises, but the price level does not.
|Question 5. 5. (TCO 6) With an MPS of .3, the MPC will be (Points : 4)|
1 – .3.
.3 – 1.
|Question 6. 6. (TCO 7) As of January 2010, slightly more than half of the money supply (M1) was in the form of (Points : 4)|
gold coins and bars.
|Question 7. 7. (TCO 7) Which of the following “backs” the value of money in the United States? (Points : 4)|
Gold stored in the Federal Reserve Bank of New York
Acceptability of it as a medium of exchange
Willingness of foreign government to hold U.S. dollars
Size of the budget surplus in the U.S. government
|Question 8. 8. (TCO 7) How many members can serve on the Board of Governors of the Federal Reserve System? (Points : 4)|
|Question 9. 9. (TCO 7) Which group is responsible for the policy of changing the money supply? (Points : 4)|
Federal Open Market Committee
Office of Management and Budget
Thrift Advisory Council
Federal Advisory Council
|Question 10. 10. (TCO 7) Money is “created” when (Points : 4)|
a depositor gets cash from the bank’s ATM.
a bank accepts deposits from its customers.
people receive loans from their banks.
people spend the incomes that they receive.
|Question 11. 11. (TCO 7) The establishment of a federal deposit insurance program resulted from the (Points : 4)|
establishment of the Federal Reserve System in 1913.
speculation during World War I.
stock market crash of 1987.
bank panics of 1930-1933.
|Question 12. 12. (TCO 7) Which monetary policy tool was created in response to the financial crisis of 2007-2008? (Points : 4)|
Term auction facility
Target federal funds rate
Open market operations
|Question 13. 13. (TCO 7) The tools of monetary policy for altering the reserves of commercial banks are the (Points : 4)|
tax rate, transfer payments, and level of government spending.
consumer price index, inflation, and unemployment rate.
public debt, budget surplus, budget deficit, and interest rates.
discount rate, reserve ratio, open market operations, and term auction facility.
|Question 14. 14. (TCO 8) Which nation has greatly increased its role in international trade in recent years? (Points : 4)|
|Question 15. 15. (TCO 8) Nation X has a comparative advantage in the production of a product compared to Nation Y when (Points : 4)|
it imposes a tariff on the importation of the product.
its production possibilities curve expands, allowing it to produce more of the product.
it is achieving full employment and is producing the maximum amount of the product.
it has the lower domestic opportunity cost of producing the product.
|Question 16. 16. (TCO 8) A tariff is a (Points : 4)|
|Question 17. 17. (TCO 8) Tariffs and quotas are costly to consumers because (Points : 4)|
the price of the imported good falls.
the supply of the imported good increases.
import competition increases for domestic goods.
consumers shift purchases to higher-priced domestic goods.
|Question 18. 18. (TCO 8) Tariffs and import quotas would benefit the following groups, except (Points : 4)|
consumers of the product.
domestic producers of the product.
workers in domestic firms producing the product.
the government of the importing country.
|Question 19. 19. (TCO 8) About how many nations belonged to the World Trade Organization as of 2010? (Points : 4)|
|Question 20. 20. (TCO 9) French and German farmers wanting to buy equipment from an American manufacturer based in the U.S. will be (Points : 4)|
supplying dollars and also supplying euros in the foreign exchange market.
demanding dollars and also demanding euros in the foreign exchange market.
supplying dollars and demanding euros in the foreign exchange market.
supplying euros and demanding dollars in the foreign exchange market.