Test 2 study plan and everything

A person is in the labor force if any one of the following statements is true except that he or she is? ______.

An unemployed person? ______.

Choose the statement that is incorrect.

Choose the statement that is incorrect.

The Bureau of Labor Statistics reports six alternative measures of the unemployment rate. Choose the correct statements. a. Upper U dash 5 measures the job losers. b. Upper U dash 3 adds discouraged workers to the official unemployment rate. c. Upper U dash 1 measures those who are unemployed for 15 weeks or more. d. Upper U dash 3 is the official unemployment rate.

In March 2007?, the U.S. unemployment rate was 4.4 percent. In August 2008?, the unemployment rate was 6.1 percent. Assuming that the labor force remained constant between March 2007 and August 2008?, then the number unemployed? _______.

In February 2017?, the U.S. unemployment rate LOADING... was 4.7 percent. In February 2018?, the unemployment rate was 4.1 percent. Assuming that the labor force remained constant between February 2017 and February 2018?, then unemployment? _______.

In March 2007?, the U.S. unemployment rate was 4.4 percent. In August 2008?, the unemployment rate was 6.1 percent. Assuming that unemployment remained constant between March 2007 and August 2008?, then the labor force? ______._.

In February 2017?, the U.S. unemployment rate LOADING... was 4.7 percent. In February 2018?, the unemployment rate was 4.1 percent. Assuming that unemployment was constant between February 2017 and February 2018?, then the labor force? _______.

A discouraged worker? ______. An increase in discouraged workers? ______ the official unemployment rate and? ______ U-4.

Use the data reported by the Current Population Survey in July 2014 to answer the following question. 1. Who does the BLS classify as being? unemployed, a? part-time worker, an employed? person, a discouraged? worker, and not in the labor? force? Explain your classification. ?______ are? unemployed, ______ is a? part-time worker,? _____ is a discouraged? worker, and? _____ is not in the labor force. How will the labor force change if the following events? occur? 1. Sarah starts a second job 2. Pat finds a good job and is hired. 3. Mary takes a job at? McDonald's while she waits to start her new job. How will the unemployment rate change if Sarah quits and starts to search for a? full-time job? The unemployment rate will? _____ if Sarah quits and starts to search for a? full-time job. How will the labor force participation rate change if Kevin starts creating football apps in his garage and they turn out to be very? popular? The labor force participation will? _____ Kevin starts creating football apps in his garage and they turn out to be very popular.

USe the data reported by the Current Population Survey in July 2014 to answer the following question. 3. How will the unemployment rate change if Sarah quits and starts to search for a? full-time job? The unemployment rate will? _____ if Sarah quits and starts to search for a? full-time job. How will the labor force participation rate change if Kevin starts creating football apps in his garage and they turn out to be very? popular? The labor force participation will? _____ Kevin starts creating football apps in his garage and they turn out to be very popular.

The unemployment rate is supposed to? ______. It is an imperfect measure because? ______.

Read the news? clip, then answer the following questions. If the only change that occurred was that all the newly hired people had been unemployed in? October, then the labor force would? ______ and unemployment would? _______. If the only change that occurred was that people gave up job? searching, then the labor force would ? _______ and unemployment would? _______.

The ?working-age population is the total number of? _____ aged? _____ years and over who are not in? jail, hospital, or some other form of institutional care or in the U.S. Armed Forces.

The labor force is the number of people employed plus the? _____.

The unemployment rate is the percentage of the people in the? _____ who are unemployed.

The labor force participation rate is the percentage of the? _____ who are members of the labor force.

A marginally attached worker is a person who does not have a? job, is? _____ and? _____ to? work, has? _____ specific efforts to find a job within the previous? _____ weeks, but has looked for work sometime in the recent past.

Who in the following statements is a discouraged worker??

Unemployment arises for all of the following reasons except? ______. Some unemployment is unavoidable because? ______.

Choose the correct statements. 1. The unemployment that arises from normal labor turnover is frictional unemployment. nothing 2. Students who leave school and look for a job are frictionally unemployed. nothing 3. Structural unemployment increases during a recession and decreases during an expansion. nothing 4. Frictional unemployment increases during a recession and decreases during an expansion. nothing

Choose the statement that is incorrect.

The natural unemployment rate? ______.

Choose the statement that is incorrect.

The output gap is the gap between? _______.

When the economy goes into? recession, the output gap is? _______.

Read the news? clip, then answer the following question. Choose the statement that is incorrect. If the labor market is working? properly, there is still unemployment because? ______.

Read the news? clip, then answer the following question. The 5 million workers who cannot find jobs because of mismatching in the labor market are counted as part of the? economy's ______ unemployment because? ______.

Read the news? clip, then answer the following question. The unemployment rate in? May, 2008 is? ______.

Read the news? clip, then answer the following question. The unemployment rate tends to actually underestimate the unemployment? problem, especially during a? recession, because? ______.

Read the news? clip, then answer the following questions. The unemployment rate in May 2008 is? ______ the estimated natural unemployment rate. This implies that real GDP is? ______ potential GDP at this time.

Which of the people described in the table is unemployed because of labor market? mismatching?

Which of the following statements illustrates frictional unemployment??

Which of the following statements illustrates structural unemployment??

Cyclical unemployment is the fluctuating unemployment over the business cycle that increases during? _____ and decreases during? _____.

The natural unemployment rate is the unemployment rate when the economy is? _____.

Full employment is when there is no? _____ unemployment? or, equivalently, when all the unemployment is? _____ or? _____.

The output gap is real GDP minus? _____ expressed as a percentage of? _____.

The price level is? ______.

Choose the statement about the Consumer Price Index that is incorrect. CPI? = ______.

Choose the correct statement.

Choose the statement that is incorrect.

Choose the statement that is incorrect.

The four price indexes that are alternatives to the CPI are? ______. The chained CPI? ______.

The table shows three years of CPI data. The bias in these CPI numbers might arise from? ______. Choose the statement that is incorrect.

Inflation? ______ the real wage? rate, everything else remaining the same. People are more likely to accept a real wage cut that arises from an increase in the price level than a cut in their nominal wage rate because? ______.

The region with the highest inflation rate in 2010 is? ______. The region with the highest inflation rate in 2011 is? ______. Describe the path of the price level in Japan. The price level? ______.

The components of the CPI basket that are experiencing price increases faster than the? 12-month average include? ______. And those components that are experiencing price increases below the? 12-month average include? ______. The core CPI is the CPI excluding? ______ prices. Core CPI is a useful measure because? ______. Core CPI is a misleading measure because? ______.

Dress for Less Since? 1998, the price of the Louis Vuitton? "Speedy" handbag has more than? doubled, to? $685, while the price of Joe? Boxer's "licky? face" underwear has dropped by nearly? half, to? $8.99. As luxury fashion has become more? expensive, mainstream apparel has become markedly less so. Clothing is one of the few categories in the CPI in which overall prices have declinedlong dashabout 10 percentlong dashsince 1998. Apparel comprises? ______ percent of the CPI basket. Although luxury clothing prices have increased dramatically since the late? 1990s, the clothing category of the CPI has actually declined by about 10 percent because? ______.

The price level is the? _____.

The inflation rate is the percentage change in the? _____ from one year to the next. Deflation is a situation in which the? _____ is? _____ and the inflation rate is? _____.

Hyperinflation is an inflation rate of? _____ or higher that grinds the economy to a halt and causes a society to collapse.

The Consumer Price Index is a measure of the? _____ of the prices paid by? _____ consumers for a fixed market basket of consumption goods and services.

The core inflation rate is the annual percentage change in the? _____ price index? _____ the prices of food and energy.

An economy is at full employment when? ______.

Choose the statement that is incorrect.

The Population Survey in Blogsville for the past month is given in the? table: In Blogsville last? month, ______ million people were in the labor force and? ______ million people were in the? working-age population.

When the unemployment rate? ______ the natural unemployment? rate, real GDP? ______ potential GDP.

The CPI tells us? ______.

The unemployment that arises from normal labor turnover long dash from people entering and leaving the labor force long dash and from the ongoing creation and destruction of jobs is ?______ unemployment.

The inflation rate in 2014 ?______.

Once a? month, the Bureau of? ______ Statistics calculates the Consumer Price? Index, which is a measure of the? ______ consumers for a fixed basket of consumer goods and services.

In the United? States, the CPI basket consists of items that? ______ . ?______ has the greatest weight in the CPI basket.

Choose the statement that is incorrect.

The natural unemployment rate? _______.

The main sources of bias in the CPI are? ______. The bias in the CPI is a problem because? ______ .

Choose the statement that is incorrect.

In 2013 and in? 2014, consumers in Dexter consumed only books and pens. The prices and quantities for 2013 and 2014 are listed in the table. The reference base period for? Dexter's CPI is? 2013, and 2013 is also the year of the Consumer Expenditure Survey. The inflation rate in 2014 is? ______ percent.

The personal consumption expenditure deflator is calculated as? _______.

In 2013 and in? 2014, consumers in Dexter consumed only books and pens. The prices and quantities for 2013 and 2014 are listed in the table. The reference base period for? Dexter's CPI is 2013 and 2013 is also the year of the Consumer Expenditure Survey. The CPI in 2014 is? ______.

When the unemployment rate is less than the natural unemployment? rate, real GDP is? ______ than potential GDP and the output gap is? ______.

If we count marginally attached workers as unemployed? ______.

Choose the statement that is incorrect.

When cyclical unemployment increases and other things remain the? same, ______.

an electrician who is laid off because of the economy is in a recession experiences ?______.

The CPI basket consists of items that __ households buy. The CPI places more weight on? _______ than on? _______.

The reference base period for the CPI is? 1982-1984. In April ?2014, the CPI was 237.1. This number tells us that the? ______ of the prices paid by urban consumers for a fixed basket of consumer goods and services was? ______ .

Choose the statement that is incorrect.

If the CPI rises from 120 to? 126, then? ______.

Economic growth is? _______. Growth rates are calculated in a similar manner for all variables. Real GDP growth rate? = [(Real GDP in? ______ yearminusReal GDP in? ______ ?year) divided by Real GDP in? ______ year ?] times 100.

Choose the statement that is incorrect.

The Rule of 70 states that the number of years it takes for the level of any variable to? ______ is approximately? ______. If real GDP per person doubles in 20? years, then the annual growth rate of real GDP per person is? ______ percent a year.

China's real GDP per person was? 13,165 yuan in 2013 and? 14,088 yuan in 2014.? India's real GDP per person was? 49,516 rupees in 2013 and? 51,521 rupees in 2014. By maintaining their current growth? rates, _______.

Suppose that in 2014? China's real GDP is growing at 7 percent a year and its population is growing at 0.5 percent a year. If these growth rates? continue, then? China's real GDP per person in? ______ will be twice what it is in 2014.

The growth rate is the? _____ of a variable? - the change in the level expressed as a percentage of the initial level.

Real GDP per person is real GDP? _____.

The Rule of 70 is the number of years it takes for the level of any variable to double. It is approximately 70? _____ by the annual percentage? _____.

Over the past 100? years, the average growth rate of U.S. real GDP per person is _ percent.

Over the past 100? years, growth was most rapid during the? ______ and slowest during the? ______.

Over the last several? decades, the gap between real GDP per person in the United States and Canada ?______. The gap between real GDP per person in the United States and Africa ?______.

Between 1960 and? 2010, growth rates in real GDP per person in Hong? Kong, Korea,? Singapore, and China? ______ the growth rate of real GDP in the United States. ?China's real GDP per person in 2010 is approximately equal to real GDP per person in Hong Kong in? ______.

China was the largest economy for centuries because everyone had the same type of economylong dashsubsistencelong dashand so the country with the most people would be economically biggest. Then the Industrial Revolution sent the West on a more prosperous path. Now the world is returning to a common? economy, this time? technology-and information-based, so once again population triumphs. China was the? world's largest economy until 1890 because? ______. In? 1890, the United States surpassed China to become the? world's largest economy because? ______.

Read the news? clip, then answer the following question. Growth rates over the past few decades indicate that gaps in real GDP per person around the world are? ______.

The aggregate production function is a relationship that tells us how? _____ changes as the quantity of? _____ changes when all other influences on production remain the same.

The real wage rate is? $_____ when the money wage rate is? $2,000 and the price level is? $25.

If real GDP is? $1,000,000, exports are? $200,000, imports are? $300,000, and aggregate labor hours are? 100,000, labor productivity is? _____.

The aggregate production function is the relationship that tells us? ______, when all other influences on production remain the same.

The demand for labor is the relationship between the quantity of labor demanded and the? ______. The supply of labor is the relationship between the quantity of labor supplied and the? ______.

The quantity of labor demanded is the number of labor hours ? during a given period. The quantity of labor supplied is the number of labor hours ? hired by all the firms in the economy that all the households in the economy plan to work during a given period. The ? real money wage rate adjusts to bring the labor market to equilibrium.

Potential GDP is? ______.

The two broad sources of potential GDP growth are growth of? ______ and growth of? ______.

An increase in the population? ______ the real wage rate and? ______ the equilibrium quantity of labor. Potential GDP? ______ and potential GDP per hour of labor? ______.

An increase in labor productivity? ______ the real wage rate and? ______ the equilibrium quantity of labor. Potential GDP? ______ and potential GDP per hour of labor? ______.

The tables describe an? economy's labor market and its production function in 2014. In? 2015, the population increases and labor hours supplied increase by 40 at each real wage rate. The? economy's standard of living? ______ in 2015 because? ______.

The first table describes an? economy's labor market in 2014 and the second table describes its production function in 2014. Suppose that labor productivity increases in 2014. The increased labor productivity? ______ the demand for labor and? ______ the supply of labor. The increased labor productivity? ______ potential? GDP, and? ______ real GDP per person.

Read the news? clip, then answer the following questions. The article defines productivity as? ______. Real GDP per person is? ______.

Read the news? clip, then answer the following question. Using the news? clip's definition of? productivity, choose the statement that is incorrect.

Read the news? clip, then answer the following question. Workers in developing Asian economies who work more hours than Americans are not the? world's most productive workers because? ______.

Classical growth theory is the view that the growth of? _____ is temporary and that when it rises above the subsistence? level, a population explosion? _____.

Neoclassical growth theory is the proposition that? _____ grows because technological change induces saving and investment that make? _____ grow.

New growth theory holds that? _____ grows because of the choices people make in the pursuit of profit and that growth will? _____.

The fundamental precondition for labor productivity growth is the incentive system created by all of the following except? ______.

The sources of labor productivity growth include all of the following except? ______.

Choose the statement that is incorrect.

Read the news? clip, then answer the following questions. In both? sectors, output fell while labor productivity increased. The quantity of labor? (aggregate labor? hours) in the nonfarm sector __

Read the news? clip, then answer the following question. Potential sources for faster economic growth in India suggested in this news clip include all of the following except? ______.

For three? years, there was no technological change in Longland but capital per hour of labor increased from? $10 to? $20 to? $30 and real GDP per hour of labor increased from? $3.80 to? $5.70 to? $7.13. ?Then, in the fourth? year, capital per hour of labor remained constant but real GDP per hour of labor increased to? $10. Longland? ______ experience diminishing returns because? ______.

The key idea of classical growth theory that leads to the dismal outcome is that? ______.

According to neoclassical growth? theory, the fundamental cause of economic growth is? ______.

The key proposition of new growth theory that makes growth persist is that? ______ is not subject to diminishing returns.

Choose the statement that is incorrect.

Read the news? clip, then answer the following question. The? ______ growth theory best corresponds to the explanation given by Mr. Greenspan because Mr.? Greenspan's explanation shows? ______.

Choose the statement that is incorrect.

Choose the statement about an increase in the population that is incorrect.

According to classical growth? theory, when real GDP per person? ______, the population grows.

All of the following statements are included in new growth theory except? ______.

Labor supply growth is influenced by all of the following except?_______.

Assume that the preconditions for labor productivity growth are in place. The pace of labor productivity growth is influenced by all of the following except? ______.

Choose the statement that is incorrect.

According to new growth? theory, ______ experience diminishing returns.

Choose the statement that is incorrect.

All of the following statements are correct except? _______.

Choose the statements concerning neoclassical growth theory that are true. 1. As incomes increase both the birth rate and the death rate decrease. nothing 2. Economic growth will stop if technology stops advancing. nothing 3. Neoclassical growth theory was developed in the late 19 th century. nothing 4. Neoclassical growth theory states that growth in real GDP per person can persist indefinitely. nothing

The table provides some data on real GDP and the population of Atlantis in 2010 and 2011. If the growth rates of 2011 are maintained in future? years, real GDP per person in Atlantis will? ______.

The fundamental precondition for labor productivity growth is? _______.

Choose the statement about growth in labor productivity that is incorrect.

Between 1960 and? 2010, the gap between real GDP per person in the United States and real GDP per person in Japan? ______.

By measuring? ______, we can see that the economy of Singapore has caught up to and surpassed the economy of the United? States, but that the economies of Central and South America have not.

During the 100 years from 1914 to? 2014, real GDP per person in the United States grew at? ______.

Choose the statement that is incorrect.

Real GDP per person grows when? ______.

Choose the statement that is incorrect.

In neoclassical growth? theory, ______.

Choose the statement that is incorrect.

According to new growth? theory, ______.

Between 1914 and? 2014, the average growth rate of real GDP per person in the United States was 2 percent a year. During this? period, ______ grew at a faster rate than? ______.

An increase in the population? ______.

The table provides some data on real GDP and the population of Pacifica in 2008 and 2009. If the growth rates of 2009 are maintained in future? years, real GDP per person in Pacifica will? ______.

Choose the statement that is incorrect.

Convergence between real GDP per person in the United States and Japan was relatively? ______ during the? 1960s; convergence has recently been? ______.

The fundamental source of labor productivity growth is? ______.

The gap between real GDP per person in the United States and Hong Kong has? ______ since 1960. During this? period, the growth rate of real GDP per person in the United States has been? ______ than in Hong Kong.

An increase in labor productivity results in all of the following except ?______.

?______ sees the economy as a perpetual motion machine.

An increase in labor productivity? ______.

Physical capital is? ______. Financial capital is? ______. Examples of physical capital are? ______. Examples of financial capital are? ______.

Gross investment is? ______. Net investment is? ______.

The three main types of markets for financial capital are? _______.

Choose the correct statement.

Choose the statement that is incorrect.

Use the? (approximate) facts about the U.S. economy to answer the following questions. What was the inflation rate in 2005 and? 2009? How do you? know? The inflation rates in 2005 and 2009 were? _____ percent and? _____ percent respectively because the inflation rate equals? _____ . Use the? (approximate) facts about the U.S. economy to answer the following questions. What happened to the price of a bond between 2005 and? 2009? How do you? know? The price of a bond ? _____ between 2005 and 2009 because the? _____.

?G-20 Leaders Look to Shake off Lingering Economic Troubles The? G-20 aims to take stock of the economic recovery. One achievement in Pittsburgh could be a deal to require that financial institutions hold more capital. ?Source: USA Today?, September? 24, 2009 The? "capital" referred to in the news clip is? ______. The financial institutions that the? G-20 might require to hold more capital are? ______. The requirement to hold more capital can make financial institutions safer because by using more of its own funds and less borrowed? funds, a financial institution? ______.

Which of the following is an example of financial capital??

Using a Federal grant of? $150,000, a research lab buys equipment for? $75,000 that has depreciated by? $11,000 after two years. Calculate gross investment and net investment.

Wealth is the value of all the things that people? _____.

Saving is the amount of income that is? _____ in net taxes or spent on? _____ goods and services.

A mortgage is a legal contract that gives ownership of a? _____ to the? _____ in the event that the? _____ fails to meet the agreed loan payments? (repayments and? interest).

A bond is a promise to pay? _____ sums of money on? _____ dates.

Bonds issued by? _____ are traded in the bond market.

A type of? _____ is a ?mortgage-backed security?, which entitles? _____ to the income from a package of mortgages.

A stock is a certificate of? _____ and claim to the? _____ that a firm makes.

A stock market is a financial market in which shares of stocks of? _____ are traded.

A financial institution is a firm that operates on both sides of the markets for? _____: It? _____ in one market and? _____ in another.

The Federal Reserve? (usually called the? Fed) is the central bank of the United? States, a? _____ authority whose main role is the regulation of? _____.

Net worth is the total market value of what a financial institution has? _____ minus the market value of what it has? _____.

The loanable funds market is? ______.

The? ______ interest rate is the opportunity cost of loanable funds because? ______.

Choose the statement concerning? firms' investment decisions that is incorrect.

The demand for loanable funds is determined by? ______. The demand for loanable funds changes when? ______ changes.

Households make saving decisions by considering all of the following factors except? _______.

Choose the statement that is incorrect.

The demand for loanable funds increases and the supply of loanable funds increases. As a? result, the equilibrium real interest rate? ______ and the equilibrium quantity of loanable funds? ______. The demand for loanable funds increases and the supply of loanable funds decreases. As a? result, the equilibrium real interest rate? ______ and the equilibrium quantity of loanable funds? ______.

First? Call, Inc. is a smartphone company. First Call expects its profit to crash next year. If everything else remains the? same, how does this decrease in expected profit influence First? Call's demand for loanable? funds? This decrease in expected profit? _______ the demand for loanable funds and brings? _______ the demand for loanable funds curve.

In a speech at the CFA Society of Nebraska in February? 2007, William? Poole, former Chairman of the St. Louis Federal Reserve? said: Over most of the? post-World War II? period, the personal saving rate averaged about 6? percent, with some higher years from the mid 1970s to mid 1980s. The negative trend in the ... saving rate started in the mid? 1990s, about the same time the stock market boom started. Thus it is hard to dismiss the hypothesis that the decline in the measured saving rate in the late 1990s reflected the response of consumption to large capital gains from corporate equity? [stock]. Evidence from panel data of households also supports the conclusion that the decline in the personal saving rate since 1984 is largely a consequence of capital gains on corporate equities? [stocks]. U.S. household income has grown considerably since 1984. U.S. saving has? ______ because wealth has? ______. Households preferred to buy corporate equities rather than bonds because? ______.

The loanable funds market is the aggregate of all the individual? _____ markets.

Net taxes are taxes paid to the government minus? _____.

The sum of? _____ is called national saving.

If the annual interest paid on a? $500 loan is? $25, the nominal interest rate is? _____ percent per year. If the nominal interest rate is 5 percent per year and the inflation rate is 2 percent a? year, the real interest rate is? _____ per year.

The demand for loanable funds is the relationship between? _____ demanded and the? _____ when all other influences on borrowing plans remain the same.

The supply of loanable funds is the relationship between? _____ supplied and the? _____ when all other influences on lending plans remain the same.

A government budget surplus ? the supply of loanable funds.

The? crowding-out effect is the tendency for a government budget deficit to? ______ the real interest rate and decrease? ______. A government budget deficit? ______ the real interest rate because? ______.

According to the? Ricardo-Barro effect, a government budget deficit? ______ the real interest rate. According to the? Ricardo-Barro effect, when a government budget deficit occurs? today, ______.

Use the? (approximate) facts about the U.S. economy to answer the following questions. 1. What was the inflation rate in 2005 and? 2009? How do you? know? The inflation rates in 2005 and 2009 were? _____ percent and? _____ percent respectively because the inflation rate equals? _____ . What happened to the price of a bond between 2005 and? 2009? How do you? know? The price of a bond ? _____ between 2005 and 2009 because the? _____. What happened to the demand for loanable funds between 2005 and? 2009? How do you? know? Between 2005 and? 2009, the government budget deficit? increased, so the demand for loanable funds? _____ between 2005 and 2009. Did the change in the government budget deficit crowd out some? investment? The change in the government budget deficit? _____ crowd out some investment because the? _____. What happened to the quantity of saving and? investment? The quantity of saving? _____ and the quantity of investment? _____.

Use the? (approximate) facts about the U.S. economy to answer the following questions. What happened to the demand for loanable funds between 2005 and? 2009? How do you? know? Between 2005 and? 2009, the government budget deficit? increased, so the demand for loanable funds? _____ between 2005 and 2009.

Use the? (approximate) facts about the U.S. economy to answer the following questions. Did the change in the government budget deficit crowd out some? investment? The change in the government budget deficit? _____ crowd out some investment because the? _____. What happened to the quantity of saving and? investment? The quantity of saving? _____ and the quantity of investment? _____.

The ?crowding-out effect is the tendency for a government budget deficit to raise the? _____ and? _____ investment.

I? = ______.

A mortgage is? _______.

The table provides official estimates of U.S. wealth and U.S. saving in three years. The change in U.S. wealth exceeds U.S. saving in? ______. U.S. saving exceeds the change in U.S. wealth in? ______.

Choose the statement that is incorrect.

Choose the statement that is incorrect.

Choose the statement that is incorrect.

Choose the statement that is incorrect.

The supply of loanable funds is influenced by all of the following except ?______.

A government budget deficit? occurs, which? ______. The real interest rate? ______. Private saving ? increases decreases and investment ? decreases increases .

Choose the statement that is incorrect.

When the price of an asset? rises, ______.

How can the change in U.S. wealth differ from U.S.? saving?

A government budget surplus? occurs, which increases the ? supply of demand for loanable funds. The real interest rate? ______, household saving? ______,

Upper A decrease in current income taxes? ______ the supply of loanable funds today because it? ______. in expected future income? ______.

Money is any commodity or token that is generally acceptable as a? ______. Choose the correct statements. 1. Most people know the price of gum comma so it could serve as money because it is a unit of account. 2. Gum does not serve as money because it is not a good store of value. 3. Gum does not serve as money because it is not generally accepted in exchange for goods and services. 4. Because most people buy gum comma it can be used as money because it is a useful tool in barter.

A problem with using a commodity as money is? ______.

The main components of money in the United States today are? ______.

The two main official measures of money in the United States today are? ______. The two main official measures of money in the United States? ______ really money.

Choose the correct statement.

Indicate whether the following items are money or not money in the United States today. Cash in Citibank's cash machines ? Your loan to pay for school fees ? Coins inside a vending machine ? Your Visa card ?

Which of the following is money??

A means of payment is a method of ? _____ a debt.

Currency consists of? _____.

M1 consists of currency held by? _____ and? _____, _____, and? _____ owned by individuals and businesses.

M2 consists of? _____ plus? _____ and? _____ deposits,? _____, and other deposits.

Choose the statement that is incorrect.

The functions of depository institutions include all of the following except? ______.

Depository institutions balance risk and return by? _______.

A depository institution creates liquidity by? ______. ' Depository institutions pool risk because they use funds obtained from? ______ depositors to make loans to? ______ borrowers. Depository institutions minimize the cost of monitoring borrowers by? ______.

Depository institutions have made innovations that have changed the composition of money in all of the following ways except? ______.

Read the news? clip, then answer the following questions. European banks need more capital because? _______. The? "capital" that is referred to in the news clip is? _________. Requirements to hold more capital make banks safer because? _______.

Read the news? clip, then answer the following questions. A? bank's "balancing? act" balances? _______. The? over-pursuit of profit or underestimation of risk can lead to bank failure because? _______.

During times of? uncertainty, it might be necessary for a bank to hold large cash reserves and to have a large percentage of its assets purchased by its own capital because? ______.

A depository institution is a financial firm that takes deposits from? _____.

Reserves consist of the currency in the? _____ plus the balance on its? _____ account at? _____.

The federal funds rate is the? _____ rate on? _____ loans.

The central bank of the United States is the? ______. A central bank performs all of the following functions except? ______.

The monetary base is the sum of? _______. The monetary base is equal to? _______.

The required reserve ratio is the ?______. The Fed is the lender of last? resort, which means? _______.

Choose the correct statements. 1. The Chicago Fed implements the policy decisions of the FOMC. 2. FOMC stands for Federal Open Market Committee. 3. The chairman and the other six members of the Board of Governors are members of the FOMC. 4. Current chairman of the Fed is Alan Greenspan.

An open market purchase? ______ the monetary base. An open market sale? ______ the monetary base.

Read the news? clip, then answer the following questions. The? Fed's policy tools include all of the following except? ______ To increase its assets to? $2.3 trillion in? 2008, the Fed used? ______.

In September 2007 before the financial crisis and? recession, the Fed had assets of? $800 billion, mainly? short-term government securities. In June 2012 after two rounds of quantitative? easing, the? Fed's assets totaled? $2,600 billion. Many of those assets were? long-term securities and not all of them were government securities. Choose the statement that is incorrect. Between 2007 and 2012 the monetary base? _______.

A central bank is a banks bank and a? _____ authority that regulates a? nation's depository institutions and conducts? _____ policy, which means that it adjusts the? _____ and influences? _____.

The Federal Reserve System ?(the Fed) is the? _____ of the United States.

The Federal Open Market Committee is the? Fed's _____ committee.

The monetary base is the sum of? _____, _____, and? _____ at the Fed.

An open market operation is the purchase or sale of? _____ -? _____ - by the? _____ in the open market.

The Fed is the lender of last resort?, which means that if? _____ is short of? reserves, it can borrow from the? _____.

The required reserve ratio is the minimum percentage of? _____ that? _____ are required to hold as reserves.

Banks create money by? ______.

The quantity of money that the banking system can create is limited by? _______.

A bank manager tells you that she? doesn't create money. She just lends the money that people deposit. The bank manager is? ______ because? ______.

Read the news? clip, then answer the following question. Lowering the required reserve ratio? ______, which? ______ the quantity of loans that? China's banks can make and the quantity of money created.

Read the news? clip, then answer the following question. A lower required reserve ratio increases bank profits because? ______.

The quantity of desired reserves depends on the level of deposits and is determined by the desired reserve ratio ?- the ratio of? _____ to? _____ that the? _____ plan to hold.

We call the leakage of bank reserves into currency the currency? drain, and we call the ratio of? _____ to? _____ the currency drain ratio.

Excess reserves are a? bank's _____ reserves minus its? _____ reserves.

If the monetary base increases by? $1 million and the quantity of money increases by? $2.5 million, then the money multiplier is? _____.

The main influences on the quantity of money that people and businesses plan to hold include all of the following except? ______.

In the short? run, ______ and? ______ adjusts to achieve equilibrium.

In the short? run, when the Fed decreases the quantity of? money, people enter the loanable funds market and ? buy sell bonds.

In the long? run, an increase in the quantity of money? _______.

If the interest rate is greater than 4 percent a? year, the price of a bond? ______, and the interest rate? ______ If the interest rate is less than 4 percent a? year, the price of a bond? ______, and the interest rate? ______.

The demand for money is the relationship between the quantity of money demanded and the? _____, when all other influences on the amount of money that people wish to? _____ remain the same.

According to the quantity theory of? money, in the long run an increase in the quantity of money of 5? percent, brings? _____ in the price level.

The velocity of circulation is the average number of times a dollar of money is used annually to buy? ______. The formula used to measure the velocity of? circulation, V?, is? ______, where P is the price? level, Y is real? GDP, and M is the quantity of money.

The equation of exchange is? ______ and it is true? ______.

The? long-run historical evidence and international evidence show us that the relationship between money growth and the inflation rate? ______.

The quantity theory of money is the proposition that when real GDP? _____ potential? GDP, an increase in the quantity of money brings? _____ percentage increase in the? _____.

The velocity of circulation is the? _____ number of times in a? _____ that each dollar of money gets used to buy final goods and services.

In an? economy, there is ?$75 million in currency held outside? banks, ?$150 million in? traveler's checks, ?$275 million in currency held inside the? banks, ?$200 million in checking? deposits, ?$400 million in savings? deposits, ?$1 comma 400 million in time? deposits, and ?$1 comma 000 million in money market mutual funds and other deposits. The value of M1 is? ______ and the value of M2 is? ______.

An increase in real GDP? ______ the demand for money and financial innovation? ______.

The liabilities of the Fed are? ______, and these liabilities along with? ______ make up the monetary base.

Suppose the Fed increases the quantity of money. In the long? run, supply and demand in the? ______ market determines the real interest rate. The? ______ adjusts to make the quantity of real money supplied equal to the quantity demanded.

The money multiplier is the ratio of the change in the quantity of? ______ to the change in the quantity of? ______.

Choose the correct statement.

Money serves as a? ______.

On average in the United? States, the inflation rate and the money growth rate minus the real GDP growth rate? ______.

A central bank is? ______. The central bank in the United States is the? ______.

The demand for money is the relationship between the quantity of real money demanded and the ? nominal interest rate inflation rate when all other influences on the amount of money that people wish to hold remain the same. When the nominal interest rate? rises, the opportunity cost of holding money? ______ and the quantity of real money demanded? ______.

The ratio of reserves to deposits that a bank plans to hold is its? ______. If a bank has? $10 million in actual reserves and? $8 million in desired? reserves, then it has? ______.

Depository institutions provide four? benefits, which are? ______.

A depository institution takes deposits from? ______ and earns most of its income by? _______. The deposits of the following three types of depository institutions make up the? nation's money:? ______.

One of the? Fed's main policy tools is? ______.

Choose the statement that is incorrect.

Suppose the Fed buys? $50 million of government securities from the Bank of America. The? Fed's total assets? ______ and its total liabilities? ______.

The Bank of? America's total assets? ______ and its total liabilities? ______.

Choose the statement that is incorrect.

In the short? run, the quantity of real money and real GDP are given and the? ______ adjusts to achieve equilibrium. In the long? run, supply and demand in the loanable funds market determines the? ______. In the long? run, ? financial innovation the price level adjusts to make the quantity of real money supplied equal the quantity demanded.

International evidence shows us that? ______.

Choose the statement that is incorrect.

Choose the statement about money that is incorrect.

When the Fed buys securities from a? bank, ______.

Choose the statement about the Fed that is incorrect.

Suppose the Fed sells? $50 million of government securities to the Bank of America. The? Fed's total assets? ______ and its total liabilities? ______. The Bank of? America's total assets? ______ and its total liabilities? ______.

As a result of financial? innovation, ______ have become? ______.

Choose the statement that is incorrect.

An open market operation is? ______.

A? ______ is a depository institution that accepts savings deposits and makes mostly? home-purchase loans. A? ______ is a depository institution owned by a social or economic group such as a? firm's employees that accepts savings deposits and makes mostly personal loans.