Nane MULTIPLECHOICE Choose the one alternative that best completes the statement

Question

Nane MULTIPLECHOICE Choose the one alternative that best completes the statement or answers the question A) an asse..ha·people aro willing to acept in echange for goods and services. t) the income one eams over a period of time C a liability that people are willing to accept in exchange for gosls and services 0) one's assets net of one's liabilities at any point in time 2) If the federal govemment's expenditures are less than its tax revenues then 2 A) the bidget is balaced B) a busdget surplus results C) a budget deficit results D) No conchusion can be drawn here regarding the budget surplus or deficit without information regarding govemment purchases versus other outlays 3) Using the money demand and money supply model, an open market sale of Treasury securities by 3 the Federal keserve would cause the equilibrium interest rate to A) increase, then decrease C) not change B) increase. D) decrease 4) Which of the following is not a major function of the Federal Reserve System? A) controlling the money supply C) lender of last resort B) setting income tax rates D) clearing checks between banks 5) The statement "This car costs $19,200 illustrates which function of money? 5) A) unit of account C) standard of deferred payment B) store of value D) medium of exchange 6) The increase in government spending on unemployment insurance payments to workers who lose their jobs during a recession and the decrease in government spending on unemployment insurance payments to workers during an expansion is an example of A) discretionary monetary policy. C) automatic monetary policy. B) automatic stabilizers D) discretionary fiscal polcy. 7) The major shortcoming of a barter economy is A) that goods and services are not traded B) that money loses value from inflation. C) the requirement of a double coincidence of wants D) the requirement of specialization and exchange 8) Lowering the discount rate will A) decrease reserves, encourage banks to make fewer loans, and decrease the money supply. B) increase reserves, encourage banks to make more loans, and increase the money supply C) increase reserves, encourage banks to make more loans, and decrease the money supply. D) decrease reserves, encourage banks to make fewer loans and increase the money supply C-1

Explanation / Answer

1. A..))

money is an asset that the people are willing to accept in exchange for goods and services.

money is any item or verifiable record that is generally accepted as payment for goods and services and repayments of debts in a particular country..

2.. B..))

budget surplus results when tax revenues is greater than government spending. i.e., expenditure is less than tax revenues.

3. B..)) increase

using money demand and money supply,an open market sale of treasury securities by the federal reserve cause equilibrium interest rate decreases.

4. D..))

clearing checks between the banks is not the main function of federal reserve.because the other three are main functions like making monetary policy,inflation,bankers bank,stability of financial markets.

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