1. (TCO 5) An increase in expected future income will (Points : 4) increase aggr
ID: 1097863 • Letter: 1
Question
1. (TCO 5) An increase in expected future income will (Points : 4) increase aggregate demand and aggregate supply.decrease aggregate demand and aggregate supply.
increase aggregate supply.
increase aggregate demand. Question 2.2. (TCO 5) The upward slope of the short-run aggregate supply curve is based on the assumption that (Points : 4) wages and other resource prices do not respond to price level changes.
wages and other resource prices do respond to price level changes.
prices of output do not respond to price level changes.
prices of inputs are flexible while prices of outputs are fixed. 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) Deflation refers to a situation where (Points : 4) price level falls.
price level rises.
the rate of inflation falls.
the rate of inflation rises. Question 5.5. (TCO 6) Dissaving occurs when (Points : 4) income is greater than saving.
income is less than consumption.
saving is greater than consumption.
saving is greater than the interest rate. Question 6.6. (TCO 7) The M1 money supply is composed of (Points : 4) all coins and paper money held by the general public and the banks.
bank deposits of households and business firms.
bank deposits and mutual funds.
checkable deposits and currency in circulation. 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) Seven
Nine
12
14 Question 9.9. (TCO 7) When the Fed acts as a "lender of last resort", like it did in the financial crisis of 2007-2008, it is performing its role of (Points : 4) controlling the money supply.
setting the reserve requirements.
being the bankers' bank.
providing for check clearing and collection. 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) During the financial crisis of 2007-2008, the FDIC increased deposit insurance coverage from (Points : 4) $50,000 to $100,000 per account.
$100,000 to $250,000 per account.
$200,000 to $500,000 per account.
$500,000 to $1,000,000 per account. Question 12.12. (TCO 7) Which one of the following is a tool of monetary policy for altering the reserves of commercial banks? (Points : 4) Issuing currency
Check collection
Open-market operations
Acting as the fiscal agent for the federal government Question 13.13. (TCO 7) The Federal Reserve could reduce the money supply by (Points : 4) selling government bonds in the open market.
buying government bonds in the open market.
operating the term auction facility.
reducing the discount rate. Question 14.14. (TCO 8) Which nation has greatly increased its role in international trade in recent years? (Points : 4) Japan
Iran
Peru
China Question 15.15. (TCO 8) The principal concept behind comparative advantage is that a nation should (Points : 4) maximize its volume of trade with other nations.
use tariffs and quotas to protect the production of vital products for the nation.
concentrate production on those products for which it has the lowest domestic opportunity cost.
strive to be self-sufficient in the production of essential goods and services. Question 16.16. (TCO 8) A tariff is a (Points : 4) tax.
price ceiling.
quantity limit.
subsidy. Question 17.17. (TCO 8) If a nation agrees to set an upper limit on the total amount of a product that it exports to another nation, then this situation would be an example of (Points : 4) an import quota.
a revenue tariff.
a protective tariff.
a voluntary export restriction. Question 18.18. (TCO 8) When tariffs on imported products are removed by a nation, it will result in (Points : 4) higher prices and lower quantities consumed.
higher prices and quantities consumed.
lower prices and quantities consumed.
lower prices and higher quantities consumed. Question 19.19. (TCO 8) Which organization meets regularly to establish rules and settle disputes related to international trade? (Points : 4) The United Nations Commission on Trade Law
The United Nations Conference on Trade and Development
The World Trade Organization
The Federal Reserve Board 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. 1. (TCO 5) An increase in expected future income will (Points : 4) increase aggregate demand and aggregate supply.
decrease aggregate demand and aggregate supply.
increase aggregate supply.
increase aggregate demand.
Explanation / Answer
Increase in aggregate demand Wages and other resource prices do respond to price level changes Decrease aggregate supply The rate of inflation falls Income is less than consumption Checkable deposits and currency in circulation Gold stored Seven Being the banker’s bank People receive loans from the bank 100,000 to $250,000 per account. Open-market operations Selling government bonds in the open market. China Concentrate production on those products for which it has the lowest domestic opportunity cost Tax a voluntary export restriction lower prices and higher quantities consumed The World Trade Organization Supplying euros and demanding dollars in the foreign exchange market.
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