Econ Test 2 example #45674

22 November 2022
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question
If there is a shortage in loanable funds then, a. the quantity demanded is greater than the quantity supplied and the interest rate will rise. b. the quantity demanded is greater than the quantity supplied and the interest rate will fall. c. the quantity supplied is greater than the quantity demanded and the interest rate will rise. d. the quantity supplied is greater than the quantity demanded and the interest rate will fall. there is a shortage of loanable funds, then
answer
A
question
The present value of a payment to be made in the future falls as a. the interest rate rises and the time until the payment is made increases. b. the interest rate rises and the time until the payment is made decreases. c. the interest rate falls and the time until the payment is made increases. d. the interest rate falls and the time until the payment is made decreases.
answer
A
question
if the interest rate is 7.5 percent, then what is the present value of $4,000 to be received in 6 years? a. $2,420.68 b. $2,591.85 c. $2,996.33 d. $3,040.63
answer
B
question
If the efficient markets hypothesis is correct, then a. the number of shares of stock offered for sale exceeds the number of shares of stock that people want to buy. b. the stock market is informationally efficient. c. stock prices never follow a random walk. d. All of the above are correct.
answer
B
question
If the federal funds rate were below the level the Federal Reserve had targeted, the Fed could move the rate back towards its target by a. buying bonds. This buying would reduce bank reserves. b. buying bonds. This buying would increase bank reserves. c. selling bonds. This selling would reduce bank reserves. d. selling bonds. This selling would increase bank reserves.
answer
C
question
7. A bank run is when a. a bank runs up it's interest rates. b. too many people come to withdraw their deposits. c. a bank cannot collect on the loans it has offered. d. the federal reserve places a fine on a bank.
answer
B
question
Money supply increase formula
answer
Reserves x money multiplier
question
12. Kiera is a stay at home mother with two children. Kiera's husband owns a restaurant and Kiera helps by waitressing in the restaurant several nights a week. Julio used to work for an tech firm, but the company closed last year. Julio would like to work, but has not looked for a job in the past 6 months. Which one of the following is true? a. Kiera is unemployed b. Kiera is not in the labor force c. Julio is unemployed d. Julio is not in the labor force
answer
D
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14. Capital widening is: a. an increase in capital and it results in more capital per worker. b. an increase in the varieties of machinery used to produce goods. c. the increased purchase of capital from abroad which reduces the profits of domestic firms. d. when the rate of growth of the capital stock equals the rate of growth of workers.
answer
D
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16. Suppose that some people are counted as unemployed when, to maintain unemployment compensation, they search for work only at places where they are unlikely to be hired. If these individuals were counted as out of the labor force instead of as unemployed, then a. both the unemployment rate and labor-force participation rate would be higher. b. both the unemployment rate and labor-force participation rate would be lower. c. the unemployment rate would be lower and the labor-force participation rate would be higher. d. the unemployment rate would be higher and the participation rate would be lower.
answer
B
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18. In a closed economy, national saving is usually greater than investment. equal to investment. usually less than investment because of government deficits. always less than investment.
answer
B
question
Crowding out occurs when investment declines because a. a budget deficit makes interest rates rise. b. a budget deficit makes interest rates fall. c. a budget surplus makes interest rates rise. d. a budget surplus makes interest rates fall.
answer
A
question
If an economy is at its Natural Rate of Unemployment... a) Only Cyclical Unemployment would be present c) Only frictional and structural unemployment would be present b) There would be no frictional unemployment d) Everyone is working
answer
C
question
Suppose that the interest rate is 6%. Which has the higher present value β€” a payment 8. of $100 today or a payment of $112 two years from today? a) $100 today b) $112 two years from today c)they are the same
answer
A
question
Suppose that in a closed economy GDP is equal to 15,000, taxes are equal to 4,000, consumption equals 10,000, and government expenditures equal 3,000. What are private saving and public saving? a) 1,000 and 1,000 b) 1,000 and -1,000 c) 2,000 and 1,000 d) 2,000 and -1,000
answer
C
question
Other things constant, if the government increases its expenditures but not taxes a)public saving and the interest rate will rise c) public saving will fall and the interest rate will rise b)public saving and the interest rate will fall d) public saving will rise and the interest rate will fall
answer
C
question
An investment tax credit a) shifts the demand for loanable funds right and raises the interest rate c) shifts the supply of loanable funds right and lowers the interest rate b) the demand for loanable funds left and lowers the interest rate d) shifts the supply of loanable funds left and raises the interest rate
answer
A
question
To a large extent, the acceptance of fiat money depends as much on expectations and social conventions as on government decree. a) True b) False
answer
A
question
Esmerelda worked part-time for her mother's business without pay. Tabitha was absent from work because she had strep throat. Who is counted as "employed" by the Bureau of Labor Statistics? a) Esmerelda but not Tabitha c) both of them are counted as employed b) Tabitha but not Esmerelda d) neither of them are counted as employed
answer
C
question
Jenna is searching for a job that suits her tastes about where to live. Mary is looking for a job that makes best use of her skills. a) Jenna and Mary are both frictionally unemployed c) Jenna is frictionally unemployed, and Mary is structurally unemployed b) Jenna and Mary are both structurally unemployed d) Jenna is structurally unemployed, and Mary is frictionally unemployed
answer
A
question
Suppose the Fed buys bonds from banks for a total of $200. In the end the money supply increases by $800. Assuming banks only hold required reserves, what is the reserve ratio? a) 0.5 b) 4 c) 0.25 d) 0.2
answer
C
question
In 2009, towards the end of the Great Recession, some people became discouraged and quit looking for work. Other things the same, as they quit looking for work, according to the BLS a) the labor force and the unemployment rate b) the labor force would be unchanged and the unemployment rate would fall. c) would both fall. the labor force would fall and the unemployment rate would be unchanged.
answer
A