20. Which of the following could cause a recession? A. A decline in aggregate de

Question

20. Which of the following could cause a recession? A. A decline in aggregate demand B. A decline in unemployment C. An increase in aggregate supply D. An increase in government spending

21. Inflation occurs when: A. Aggregate demand increases faster than unemployment B. Unemployment increases faster than the labor force C. Aggregate demand increases faster than output D. Output increases faster than unemployment

22. An improvement in consumer confidence will cause: A. A movement down the aggregate demand curve B. The aggregate supply curve to shift to the right C. The aggregate demand curve to shift to the right D. The aggregate demand curve to shift to the left

23. Ceteris paribus, _______ in consumer confidence will cause _______ in aggregate demand. A. A decrease; a decrease B. A decrease; no change C. An increase; a decrease D. An increase; no change

24. Which of the following is not true about money? A. It promotes the specialization of labor B. It is a mechanism for transforming current income into future purchases C. It must be minted by the government in order to have value D. It facilitates the continuous series of exchanges that characterize a market economy

25. The basic money supply includes: A. Currency, transactions accounts and traveler's checks B. Currency, transactions accounts and savings account balances C. Currency, transactions accounts and credit card balances D. Currency, savings account balances and traveler's checks

26. Money creation occurs when: A. A person puts cash in a bank B. A person deposits a payroll check in their checking account C. Banks make loans to borrowers D. The Federal Reserve increases the reserve requirement

27. The reserve ratio is equal to: A. Bank reserves plus total deposits B. Bank reserves divided by total deposits C. Total deposits minus bank reserves D. Total deposits divided by bank reserves

28. The reserve requirement directly limits the ability of banks to: A. Change their interest rates B. Advertise their services C. Accept additional deposits D. Make new loans

29. Monetary policy involves the use of money and credit controls to: A. Move the economy along the aggregate demand curve B. Move the economy along the aggregate supply curve C. Shift the aggregate demand curve D. Shift the aggregate supply curve

30. Which of the following is not a basic monetary policy tool used by the Fed? A. The discount rate B. Reserve requirements C. Open-market operations D. The income tax rate

31. Required reserves: A. Must be held at the regional Fed bank B. Represent the dollars that a bank can lend C. Are the minimum amount of reserves a bank is required to hold D. Are equal to total reserves minus expected reserves

32. Which of the following is not true about excess reserves? A. They change when the reserve requirement changes B. They are equal to the required reserve ratio times transactions deposits C. They are bank reserves beyond what the bank is required to hold D. They represent the dollars an individual bank can lend

33. The alternative combinations of goods and services that could be produced with all available resources and technology is the: A. GDP per capita B. Real GDP C. Aggregate supply curve D. Production possibilities

34. If an economy moves from a point inside the production possibilities curve to a point on the curve: A. There is increased use of the productive capacity B. The level of unemployment has increased C. The available resources must have increased D. The level of technology must have increased

35. A major goal of long-run economic policy is to: A. Increase food production B. Reduce transfer programs C. Increase potential GDP D. Increase population

36. To produce a combination of goods and services beyond the current production possibilities curve, an economy must: A. Use more of the available resources and technology B. Raise the prices of goods and services so that firms will produce more C. Find more resources or develop new technology D. Experience population growth

37. Which of the following measures the actual quantity of goods and services produced in the United States? A. Nominal GDP B. GDP per worker C. Real GDP per capita D. Real GDP

38. GDP per capita is the best measurement for determining the: A. Impact of the marginal tax rate on AS B. Rule of 72 C. Standard of living D. Productivity of the work force

39. Which of the following is an example of fiscal policy? A. An increase in income taxes B. Deregulation of financial institutions C. Relaxed immigration laws D. An increase in the discount rate

40. An automatic stabilizer is: A. A government spending or tax change that automatically responds counter to the business cycle B. A tax cut approved by Congress prior to an election year C. A monetary supply or interest rate change that automatically responds counter to the business cycle D. Supply-side policy designed by Congress to shift aggregate supply to the right.

could you plz help with these questions?

Explanation / Answer

20. Which of the following could cause a recession?

A. A decline in aggregate demand

B. A decline in unemployment

C. An increase in aggregate supply

D. An increase in government spending

Ans. is D. An increase in government spending

(Although there are number of factors which contribute to an economy to fall in recession. But main cause of recession is inflation)

21. Inflation occurs when:

A. Aggregate demand increases faster than unemployment

B. Unemployment increases faster than the labor force

C. Aggregate demand increases faster than output

D. Output increases faster than unemployment

Ans. is C. Aggregate demand increases faster than output

22. An improvement in consumer confidence will cause:

A. A movement down the aggregate demand curve

B. The aggregate supply curve to shift to the right

C. The aggregate demand curve to shift to the right

D. The aggregate demand curve to shift to the left

Ans is. C. The aggregate demand curve to shift to the right

23. Ceteris paribus, _______ in consumer confidence will cause _______ in aggregate demand.

A. A decrease; a decrease

B. A decrease; no change

C. An increase; a decrease

D. An increase; no change

Ans is. A. A decrease; a decrease

24. Which of the following is not true about money?

A. It promotes the specialization of labor

B. It is a mechanism for transforming current income into future purchases

C. It must be minted by the government in order to have value

D. It facilitates the continuous series of exchanges that characterize a market economy

Ans is. A. It promotes the specialization of labor

25. The basic money supply includes:

A. Currency, transactions accounts and traveler's checks

B. Currency, transactions accounts and savings account balances

C. Currency, transactions accounts and credit card balances

D. Currency, savings account balances and traveler's checks

Ans. is D. Currency, savings account balances and traveler's checks

Related Questions

Navigate

• Browse (All)
• Browse 2
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.