Econ Quizzes Chs 10, 12-16 (Final Exam)

The fraction, or percentage, of total income which is consumed is called the:

If the marginal propensity to consume is 0.9, then the marginal propensity to save must be:

The multiplier effect magnifies the effect of a decrease in spending, resulting in a bigger decrease in real GDP. (T/F)

There are only two things that people could do with their disposable income - spend it or save it. (T/F)

A decline in the real interest rate (in the market) will:

If households consume less at each level of disposable income, they are:

Dissaving occurs when:

If a family's MPC is 0.7, it means that the family is:

The MPC can be defined as the:

A lower real interest rate typically induces consumers to:

The long-run aggregate supply analysis assumes that:

Minimum wage laws tend to make the price level more flexible rather than less flexible.(T/F)

A decrease in government spending will cause:

The long-run aggregate supply curve is:

More government regulation usually results in an increase in aggregate supply (T/F)

The short-run version of aggregate supply assumes that product prices are:

If the cost of resources decreases, then real domestic output will increase. (T/F)

If the national incomes of our trading partners (countries like Canada, Great Britain & Germany) increase, then what happens to our Aggregate demand & why?

Which of the following events would most likely reduce aggregate demand? An increase in expected returns on investment A reduction in business and personal tax rates An increase in real interest rates A reduction in the amount of existing capital stock

If the dollar appreciates relative to foreign currencies, then:

Fiscal policy refers to the:

As of 2012, more than half of the total debt of the U.S. government was owed to foreigners. (T/F)

When the Federal government uses taxation and spending actions to stimulate the economy it is conducting:

An appropriate fiscal policy for a severe recession is:

The public debt is the accumulation of all deficits and surpluses that have occurred through time.

Contractionary fiscal policy is so named because it:

Suppose that the economy is in the midst of a recession. Which of the following policies would most likely end the recession and stimulate output growth?

Which of the following did not contribute directly to the Great Recession?

A contractionary fiscal policy is shown as a:

Fiscal policy is mainly undertaken by the Federal Reserve to influence the money supply. (T/F)

If you are estimating your total expenses for school next semester, you are using money primarily as:

The Federal Reserve System is independent of Congress and the President, and does not have to follow orders from either Congress or the President.

When a consumer wants to compare the price of one product with another, money is primarily functioning as a:

The basic requirement for an item to function as money is that it be:

The M1 money supply is composed of: (select all that apply)

The functions of money are to serve as a:

When you use money to purchase groceries, money is functioning as a store of value. (T/F)

The value of money in the United States is based on the stock of gold and silver held by the United States government. (T/F)

Which of the following would be considered to be the most liquid? Savings deposits Checkable deposits Money market mutual funds Small time deposits

The use of a debit card is most similar to:

Excess reserves refer to the:

A bank that has assets of $85 billion and a net worth of $10 billion must have:

A bank has $2 million in checkable deposits. In the bank's balance sheet, this would be part of:

When you deposit money at a bank, the bank will normally turn around and lend most of it to a borrower.

A bank can get additional excess reserves by doing any of the following, except:

The primary reason commercial banks must keep required reserves on deposit at the Fed is to:

When cash is withdrawn from a checkable-deposit account at a bank:

Which of the following describes the identity embodied in a balance sheet?

A commercial bank has no excess reserves until a depositor places $5000 in cash at the bank. The commercial bank then lends $4000 to a borrower. As a consequence of these transactions the size of the money supply has:

Money is "created" when:

The most frequently used instrument of the Federal Reserve System to control the money supply is the required reserve ratio.

The main tools that the Fed can use to alter the reserves of commercial banks are the required-reserve ratio and the following, except:

The purpose of an expansionary monetary policy is to increase:

If the Federal Reserve System buys government securities from commercial banks and the public:

What is one of the advantages of monetary policy over fiscal policy?

When the Fed sells government securities in the open market, its intent is to try to increase aggregate demand.

The purchase and sale of government securities by the Fed is called:

If bond prices decrease, then the:

A television report states: "The Federal Reserve will lower the discount rate for the fourth time this year." This report indicates that the Federal Reserve is most likely trying to:

A consumer holds money to meet spending needs. This would be an example of the: