Question 1 The actual change in the money supply equals Question 1 options:the change in reserves times the reserve requirement ratio.the change in excess reserves times the money multiplier.the actual change in excess reserves.the change in required reserves times the money multiplier.Save Question 2 The required reserve ratio equals 10 percent and all banks initially have zero excess reserves. The Fed buys $1 million in U.S. government securities. The most the money supply can increase is Question 2 options:$1 million.$10 million.$8 million.$4 million.Save Question 3 The more people decide to hold currency, the Question 3 options:smaller the actual money multiplier.greater control the Fed has over the money supply.larger the actual money multiplier.larger the money supply.Save Question 4 The discount rate is the Question 4 options:interest rate on short-term U.S. government securities.interest rate banks charge their best customers.interest rate the Fed charges on loans made to depository institutions.interest rate the Fed charges to the largest and most secure manufacturing concerns in the country.Save Question 5 The most precise way the Fed has to control the money is Question 5 options:by adjusting the discount rate.open market operations.by encouraging excess reserves.by adjusting the reserve requirement.Save Question 6 According to the above figure, a shortage is shown between which two points? Question 6 options:C and BA and BE and FA and ESave Question 7 A decrease in demand and a decrease in supply will lead to a Question 7 options:decrease in quantity but the effect on price is indeterminate.decrease in price but the effect on quantity is indeterminate.decrease in price and an increase in quantity.decrease in price and a decrease in quantity.Save Question 8 If the current price of a market basket of goods is $850 and the base year price for the same market basket is $500, what is the value of the price index? Question 8 options:100170140120Save Question 9 The only way that a society can produce outside the production possibilities curve is Question 9 options:by producing efficiently.through economic growth.by obeying the Law of Increasing Relative Cost.to use the concept of opportunity cost.Save Question 10 Suppose the tax rate on the first $10,000 income is 0; 10 percent on the next $20,000; 20 percent on the next $20,000; 30 percent on the next $30,000; and 40 percent on any income over $80,000. Family A has income of $40,000 and Family B has income of $100,000. What is the marginal and average tax rate for each family? Question 10 options:Family A: marginal20 percent; average10 percent; Family B: marginal40 percent; average23 percent.Family A: marginal20 percent; average20 percent; Family B: marginal40 percent; average40 percent.Family A: marginal20 percent; average15 percent; Family B: marginal40 percent; average20 percent.Family A: marginal10 percent; average10 percent; Family B: marginal30 percent; average30 percent.Save Question 11 The marginal tax rate is equal to Question 11 options:the change in the tax payment divided by the change in income.the average tax payment divided by the total tax payment.the percent of total income that goes to taxes.the total tax payment divided by total income.Save Question 12 One solution to the Social Security problem cited in the text is to Question 12 options:increase the payment to retirees.reduce the payments to retirees.lower the Social Security tax percentage.let the Federal Reserve run the program.Save Question 13 Social Security taxes are regressive because Question 13 options:they apply only to rich people.they are applied to retired people only.they are not applied to income beyond a certain amount.they are applied to welfare recipients.Save Question 14 Question 14 options:Assume an open, mixed economy (C + I + G + X = real GDP) and an MPS of .2 What is the multiplier? If government spending (G) increases by $50B, how much will real GDP increase? If taxes also increase by $50B, consumption (C) will fall by how much? The result will be a $200B decline in real GDP. Was this policy of increasing government spending and taxes by the same amount expansionary, contractionary, or ineffective? Save Question 15 The U.S. fiduciary monetary system Question 15 options:puts capital controls in place.is one where money is not convertible to a fixed quantity of gold.controls the private banking system.is the one agency responsible for providing coins and paper currency.Save Question 16 Refer to the above table. The value of M1 is Question 16 options:$1,360 billion.$2,560 billion.$910 billion.$860 billion.Save Question 17 Possession of information by one party in a financial transaction but not by the other party is Question 17 options:financial intermediation.moral hazard.asymmetric information.adverse selection.Save
Question 1 The actual change in the money supply equals Question 1 options:the change in reserves times the reserve requirement ratio.the change in excess reserves times the money multiplier.the actual change in excess reserves.the change in
Question 2 The
Question 3 The more people decide to hold currency, the Question 3 options:smaller the actual money multiplier.greater control the Fed has over the money supply.larger the actual money multiplier.larger the money supply.Save
Question 4 The discount rate is the Question 4 options:interest rate on short-term U.S. government securities.interest rate banks charge their best customers.interest rate the Fed charges on loans made to depository institutions.interest rate the Fed charges to the largest and most secure manufacturing concerns in the country.Save
Question 5 The most precise way the Fed has to control the money is Question 5 options:by adjusting the discount rate.open market operations.by encouraging excess reserves.by adjusting the reserve requirement.Save
Question 6
According to the above figure, a shortage is shown between which two points?
Question 6 options:C and BA and BE and FA and ESave
Question 7 A decrease in demand and a decrease in supply will lead to a Question 7 options:decrease in quantity but the effect on price is indeterminate.decrease in price but the effect on quantity is indeterminate.decrease in price and an increase in quantity.decrease in price and a decrease in quantity.Save
Question 8 If the current price of a market basket of goods is $850 and the base year price for the same market basket is $500, what is the value of the price index? Question 8 options:100170140120Save
Question 9 The only way that a society can produce outside the
Question 10 Suppose the tax rate on the first $10,000 income is 0; 10 percent on the next $20,000; 20 percent on the next $20,000; 30 percent on the next $30,000; and 40 percent on any income over $80,000. Family A has income of $40,000 and Family B has income of $100,000. What is the marginal and average tax rate for each family? Question 10 options:Family A: marginal20 percent; average10 percent; Family B: marginal40 percent; average23 percent.Family A: marginal20 percent; average20 percent; Family B: marginal40 percent; average40 percent.Family A: marginal20 percent; average15 percent; Family B: marginal40 percent; average20 percent.Family A: marginal10 percent; average10 percent; Family B: marginal30 percent; average30 percent.Save
Question 11 The marginal tax rate is equal to Question 11 options:the change in the tax payment divided by the change in income.the average tax payment divided by the total tax payment.the percent of total income that goes to taxes.the total tax payment divided by total income.Save
Question 12 One solution to the Social Security problem cited in the text is to Question 12 options:increase the payment to retirees.reduce the payments to retirees.lower the Social Security tax percentage.let the Federal Reserve run the program.Save
Question 13 Social Security taxes are regressive because Question 13 options:they apply only to rich people.they are applied to retired people only.they are not applied to income beyond a certain amount.they are applied to welfare recipients.Save
Question 14 Question 14 options:Assume an open, mixed economy (C + I + G + X = real
Question 15 The U.S. fiduciary monetary system Question 15 options:puts capital controls in place.is one where money is not convertible to a fixed quantity of gold.controls the private banking system.is the one agency responsible for providing coins and paper currency.Save
Question 16
Refer to the above table. The value of M1 is
Question 16 options:$1,360 billion.$2,560 billion.$910 billion.$860 billion.Save
Question 17 Possession of information by one party in a financial transaction but not by the other party is Question 17 options:financial intermediation.moral hazard.asymmetric information.adverse selection.Save
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