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Transcript
Multiple Choice Quiz 1. The labor force consists of A) the entire adult population. B) that portion of the adult population that is currently employed C) that portion of the population over age sixteen that is unemployed but is actively seeking work D) that portion of the population over age sixteen who are employed or who are actively seeking employment. 2. The unemployment rate A) is obtained by dividing the number of unemployed people by the number of people in the labor force. B) is obtained by dividing the number of unemployed people by that portion of the population that is older than age sixteen. C) is obtained by dividing the number of unemployed people by the total population. D) is obtained by calculating the ratio of the total number of people employed to the total population and subtracting the result from the number "1" in order to obtain the unemployment rate. 3. The term “inflation” is used to describe a situation in which a. the overall level of prices in the economy is increasing. b. incomes in the economy are increasing. c. stock-market prices are rising. d. the economy is growing rapidly. 4. The inflation rate is defined as the a. price level. b. change in the price level. c. price level divided by the price level in the previous period. d. percentage change in the price level from the previous period. 5. During periods of rising prices A) wages also tend to rise. B) wealth gets redistributed from some individuals to others. C) some individuals change their consumption, saving, or investment behavior due to the uncertainties associated with inflation. D) All of the above are true. 6. If the consumer price index was 100 in the base year and 107 the following year, the inflation rate was a. 107 percent. b. 10.7 percent. c. 7 percent. d. None of the above are correct. 7. According to the Keynesian view of the macro economy, A) the economy is inherently stable. B) the economy is not always stable; however, the economy quickly returns to full employment. C) the economy is inherently unstable; however, government intervention would only worsen the situation. D) not only is the economy inherently unstable, but government has the ability to intervene in a way that will increase economic stability. 8. The aggregate supply curve is A) always horizontal. B) always vertical. C) horizontal in the long run but clearly vertical in the short run. D) typically upward sloping. 9. Macroeconomic equilibrium is associated with A) the intersection of the aggregate demand and aggregate supply curves. B) any point on the aggregate supply curve. C) any point on the aggregate demand curve. D) all points above the intersection of the aggregate demand and aggregate supply curves but no points below the intersection. 10. Which change in the price index shows the greatest rate of inflation: 100 to 110, 150 to 165, or 180 to 198? a. 100 to 110 b. 150 to 165 c. 180 to 198 d. All changes show the same rate of inflation. 11. The average amount of goods and services produced from each hour of a worker's time is called a. per capita GDP b. per capita GNP c. productivity d. human capital 12. The inputs used to produce goods and services are also called a. productivity indicators. b. capitalization producers. c. production functions. d. factors of production. 13. The primary components of aggregate demand are A) consumption, investment, youth expenditures and exports minus imports. B) health care, education, automobiles and net exports. C) consumption, investment, government spending and net exports. D) entertainment, housing, food and, finally, education. 14. The following represent examples of investment spending A) the purchase of savings bonds. B) the purchase of stock. C) the purchase of modern machines for a local factory. D) All of the above represent examples of investment spending. 15. During a recession the economy experiences a. rising employment and income. b. rising employment and falling income. c. rising income and falling employment. d. falling employment and income. 16. Which of the following is included in the aggregate demand for goods and services? a. consumption demand b. investment demand c. net exports d. All of the above are correct. 17. When taxes decrease, consumption a. increases, so aggregate demand shifts right. b. increases, so aggregate supply shifts right. c. decreases, so aggregate demand shifts left. d. decreases, so aggregate supply shifts left. 18. The marginal propensity to consume plus the marginal propensity to save A) always add to a number less than one. B) always add to one. C) can add to any number since they are independent data series. D) generally add to a number larger than one since the poor consume while the rich save. 19. Which of the following is RIGHT? A) the multiplier is equal to 1/(1 - MPS) B) the multiplier is equal to 1/(1 - MPC) C) the multiplier is equal to 1/(1 + MPS) D) the multiplier is equal to (1 - MPC)*10. 20. When the government spends more, the initial effect is that a. aggregate demand shifts right. b. aggregate demand shifts left. c. aggregate supply shifts right. d. aggregate supply shifts left. 21. A rightward shift in aggregate demand, especially when it is to the right of the full employment level of output A) increases output and employment but has no effect on prices. B) decreases prices but has no effect on output. C) increases both prices and output, running the risk of renewed inflation. D) causes an increase in employment and output but a decrease in prices. 22. Barter consists A) of the direct exchange of one good for another without the use of money. B) of the ability to conduct a clever negotiation. C) of the purchase of a good for money at a market. D) None of the above are true. 23. Aggregate demand shifts left when the government a. decreases taxes. b. cuts military expenditures. c. Both of the above are correct. d. None of the above is correct. 24. If countries that imported from the United States went into recession, we would expect that U.S. net exports would a. rise, making aggregate demand shift right. b. rise, making aggregate demand shift left. c. fall, making aggregate demand shift right. d. fall, making aggregate demand shift left. 25. An increase in government spending initially and primarily shifts a. aggregate demand right. b. aggregate demand left. c. aggregate supply right. d. neither aggregate demand nor aggregate supply. 26. The government purchases multiplier is defined as a. MPC. b. 1 – MPC. c. 1/MPC. d. 1/(1 – MPC). 27. If the MPC = 3/5, then the government purchases multiplier is a. 5/3. b. 5/2. c. 5. d. 15. 28. If the multiplier is 2.5, the MPC is a. 0.2. b. 0.6. c. 0.75. d. 1.00. 29. Tax cuts a. and increases in government expenditures shift aggregate demand right. b. and increases in government expenditures shift aggregate demand left. c. shift aggregate demand right while increases in government expenditures shift aggregate demand left. d. shift aggregate demand left while increases in government expenditures shift aggregate demand right. 30. If taxes a. increase, consumption increases, aggregate demand shifts right. b. increase, consumption decreases, aggregate demand shifts left. c. decrease, consumption increases, aggregate demand shifts left. d. decrease, consumption decreases, aggregate demand shifts right. 31. Examples of things that have been or are currently used as money include A) U.S. dollars. B) Tobacco C) Furs D) All of the above are relevant examples. 32. Which of the following represents the largest single element of the M1 money supply? A) Cash and coins. B) U.S. savings bonds. C) Transactions accounts such as checking accounts. D) Paper money that is backed by gold or silver to give it value. 33. Suppose that the reserve ratio is 5 percent and that a bank has $1,000 in deposits. Its required reserves are a. $5. b. $50. c. $95. d. $950. 34. The term "reserve ratio" A) describes the ratio of a bank's reserves to its deposits. B) describes the ratio of an individual's assets to their monthly expenditures. C) describes the ratio of a bank's assets to its liabilities. D) describes the ratio of unused productive capacity to total productive capacity to describe the extent of "tightness" or "looseness" in the aggregate economy. 35. Suppose a bank has $10,000 in deposits and $8,000 in loans. It has a reserve ratio of a. 2 percent. b. 12.5 percent c. 20 percent. d. 80 percent. 36. An individual bank can make additional loans up to A) an amount equal to total reserves minus excess reserves. B) an amount equal to its excess reserves. C) any amount it can persuade customers to borrow. D) an amount equal to its assets minus its liabilities. 37. Under a fractional reserve banking system, banks a. hold more reserves than deposits. b. generally lend out a majority of the funds deposited. c. cause the money supply to fall by lending out reserves. d. All of the above are correct. 38. When there is an increase in the money supply A) generally there is a resulting rightward shift of the aggregate supply curve. B) generally there is a resulting leftward shift of the aggregate supply curve. C) generally there is a resulting rightward shift of the aggregate demand curve. D) generally there is a resulting leftward shift of the aggregate demand curve. 39. Monetary policy A) is the use of tax increases or cuts designed to change the amount of money available for spending. B) is the use of audits(审计)to make certain that banks follow bank policy. C) is the use of money and credit controls to influence macroeconomic activity. D) exists only in textbooks and has no applicability to the "real world." 40. If the reserve ratio is 5 percent and a bank receives a new deposit of $500, this bank a. must increase its required reserves by $25. b. will initially see its total reserves increase by $500. c. will be able to make a new loan of $475. d. All of the above are true. 41. The Board of Governors of the Fed A) is an advisory group consisting of 7 state governors who represent the views of individual states in monetary policy. B) consists of seven members appointed by the President of the United States who together act as the key decisionmaking entity for monetary policy. C) is an advisory group consisting of 13 large commercial bank CEO's who represent the interests of the private banking sector in monetary policy. D) is the primary monetary group responsible for buying and selling bonds designed to change reserves in the banking system. 42. When there is an increase in the reserve requirement A) there is typically a resulting decrease in the money supply. B) there is typically a resulting increase in the money supply since banks have more required reserves to work with. C) there is also an increase in the money multiplier. D) it generally reflects a desire by monetary authorities to stimulate the economy. 43. Open-market operations A) consist of rules designed to open monetary operations to public review. B) consist of changes in the discount rate that is open to the entire market to see. C) consist of changes in the reserve requirements. D) consist of purchases or sales of government securities by monetary authorities designed to change reserves in the banking system. 44. "Discounting" is a term used to A) describe the serious distrust the public has with monetary authorities. B) describe bank loans to customers on extremely favorable terms. C) describe a loan make by the Small Business Administration to a small business on favorable terms. D) describe the process by which a bank borrows reserves from the Fed. 45. The discount rate A) is the rate of interest charged by the Fed when it provides reserves to private banks. B) is the reduction in the prime rate that big banks provide to "fat cat" (有钱有势的) corporate borrowers. C) is always equal to the market rate minus the core rate of inflation. D) is the rate that private banks charge other private banks for a loan. 46. If the monetary authorities wanted to stimulate the economy, they would most likely A) reduce the discount rate. B) decrease excess reserves in the banking system. C) increase excess reserves in the banking system. D) Both (a) and (c) are true. 47. As the reserve ratio increases, the money multiplier a. increases. b. does not change. c. decreases. d. could do any of the above. 48. Monetary policy designed to stimulate economic activity is most effective A) when it induces a corresponding leftward shift of the aggregate supply curve. B) when the aggregate supply curve is vertical. C) when the aggregate supply curve is horizontal. D) when the aggregate demand curve is horizontal. 49. If the central bank in some country lowered the reserve ratio, the money multiplier a. would increase. b. would not change. c. would decrease. d. could do any of the above. 50. If the reserve ratio is 10 percent, the money multiplier is a. 100. b. 10. c. 9/10. d. 1/10. 51. If the reserve ratio increased from 10 percent to 20 percent, the money multiplier would a. rise from10 to 20. b. rise from 5 to 10. c. fall from 10 to 5. d. not change. 52. If the reserve ratio is 10 percent, $1,000 of excess reserves can create a. $100 of new money. b. $1,000 of new money. c. $10,000 of new money. d. None of the above are correct. 53. Which of the following is not a tool of monetary policy? a. open market operations b. reserve requirements c. changing the discount rate d. increasing the deficit 54. To increase the money supply, the Fed could a. sell government bonds. b. increase the discount rate. c. decrease the reserve requirement. d. None of the above is correct. 55. When the Fed conducts open market purchases, bank reserves a. increase and banks can increase lending. b. increase and banks must decrease lending. c. decrease and banks can increase lending. d. decrease and banks must decrease lending. 56. In a fractional reserve banking system, an increase in reserve requirements a. increases both the money multiplier and the money supply. b. decreases both the money multiplier and the money supply. c. increases the money multiplier, but decreases the money supply. d. decreases the money multiplier, but increases the money supply. 57. If the discount rate is lowered, banks choose to borrow a. less from the Fed so reserves increase. b. less from the Fed so reserves decrease. c. more from the Fed so reserves increase. d. more from the Fed so reserves decrease. 58. The interest rate the Fed charges on loans it makes to banks is called a. the prime rate. b. the federal funds rate. c. the discount rate. d. the LIBOR. 59. Economic growth theory is primarily concerned with A) the long-run view of the economy . B) short-run economic stabilization. C) factors that cause short-run fluctuations in the money supply. D) factors that influence changes in the growth rate of the national debt. 60. The primary mechanism for achieving economic growth A) is represented by increased capacity utilization, which is represented by a movement from a point inside the production possibilities curve to a point on the curve. B) is represented by a movement from an undesirable point on a given production possibilities curve to a more desirable point on a given production possibilities curve. C) is by emphasizing macroeconomic stabilization. D) is represented by changes in a nation's productive capacity, represented by an outward shift of the production possibilities curve. 61. GDP per capita A) is the amount of GDP produced per unit of capital equipment since capita is the Latin root word for capital. B) is GDP divided by the total population. C) is the amount of GDP produced by an individual state. D) None of the above are true. 62. For GDP per capita to grow A) The GDP growth rate has to exceed the growth rate of capital. B) The GDP growth rate has to exceed the growth rate of money or financial capital. C) The marginal rate of GDP growth has to exceed the average rate of GDP growth. D) The GDP growth rate has to exceed the population growth rate. 63. If the per capita growth rate is 4%, A) Output per worker doubles every 18 years. B) Output per worker doubles every 36 years. C) Output per worker doubles every 12 years. D) Output per worker remains stable if the population growth rate is also 4%. 64. Productivity is a measure of A) output per unit of input. B) how hard individuals work, not how much they produce. C) the amount of human capital workers obtain through training and experience. D) the amount of capital per worker. 65. The following are sources of increased productivity: A) improved labor skills achieved by the job training. B) increases in the amount of capital per worker. C) technological advances. D) All of the above are sources of increased productivity. 66. According to supply-side arguments A) the only effect of tax cuts is to stimulate aggregate demand, resulting in a rightward shift of the aggregate demand curve. B) the primary effect of tax cuts is to make the rich richer and the poor poorer. C) reduced tax cuts tend to make the aggregate supply curve steeper(陡峭的). D) tax cuts can stimulate savings and investment, resulting in increased capital accumulation, which acts to shift the aggregate supply curve to the right. 67. Food and drug standards designed to protect consumers from dangerous products A) help prevent dangerous products from entering the market. B) cause fewer drugs to be developed, which could result in increased deaths due to the lack drug development. C) cause those drugs that are developed to be more expensive. D) All of the above are true.