Reference no: EM133169152

QUIZ 1.

Question 1.

In addition to lowering the discount rate to increase the money supply, the Fed could also

purchase bonds on the open market and raise reserve requirements.

sell bonds on the open market and raise reserve requirements.

purchase bonds on the open market and lower reserve requirements

sell bonds on the open market and lower reserve requirements.

Question 2.

At lower interest rates the

money supply is indeterminate.

money supply is lower.

quantity of money demanded is higher.

quantity of money demanded is lower.

Question 3

Selling government bonds through open market operations allows the Federal Reserve to

decrease money in the treasury.

decrease the money supply in the private sector

receive discounts on future sales.

receive a high rate of interest on the bonds

Question 4

How can the Federal Reserve actually increase the money supply?

by delaying transfer of money among banks

by raising the discount rate

by printing more money

by purchasing more government bonds in the open market

Question 5

What would be a way for the Federal Reserve to stimulate a sluggish economy?

print more money

buy government bonds on the open market

sell more government bonds

encourage the stock market

Question 6

What would be a way for the Federal Reserve to slow down the economy when it is growing too quickly or is inflationary?

print more money

buy back government bonds on the open market

sell more government bonds

encourage the stock market

Question 7

An open market purchase by the Fed

increases the total amount of reserves in the banking system.

decreases the total amount of reserves in the banking system.

does not change the total amount of reserves in the banking system

causes the reserve requirement to fall.

Question 8

An increase in the discount rate

reduces the cost of reserves borrowed from the Fed.

signals the Fed's desire to increase the money supply.

signals the Fed's desire to lend increased reserves to banks.

increases the cost of reserves borrowed from the Fed.

Question 9

If the Federal Reserve conducts an open market purchase, the

interest rate will not change.

interest rate will increase.

interest rate will decrease

money supply is decreased

Question 10

Which of the following is associated with the crowding-out effect

Government borrowing that competes with private-sector borrowing

A reduction in private investment spending due to an increase in government borrowing

A possible result of expansionary fiscal policy

All of the above

QUIZ 2.

Question 1

An event that allows the economy to operate more efficiently by producing more outputs without using any more inputs is referred to as

absolute progress

efficiency progress

capital investment.

technological progress.

Question 2

All of the following can cause technological progress EXCEPT

research and development

education.

free trade.

population decreases.

Question 3

It is possible for an economy to become more productive and per-capita output to increase if

new ideas are generated.

inventions are developed.

technology is improved

all of the above

Question 4

Knowledge and skills are part of ________ in an economy

educational functions

human capital

market growth

innovation

Question 5

Economic growth is severely impeded in economies

with a lack of clear property rights.

with a strong central government.

with high rates of convergence

which encourage induced innovation

Question 6

Monopoly profits lead to technological process by

carefully investing deadweight loss.

encouraging the development of innovations by firms attempting to break a monopoly.

firms lobbying Congress for protection of their monopolies.

increasing the amount of human capital in the economy.

Question 7

What is the only thing that makes an economy grow in the long run?

Increases in labor productivity growth

Increases in the price level

Increases in the interest rate

Increases in the labor force

Question 8

Economists suggest that trade's main advantage is allowing the world to achieve

economic growth for all countries

greater equality between countries

more self-sufficiency

specialization and the resulting economies of scale

Question 9

Among the institutional structures that promote economic growth, most economists would include

religious freedom, and restricted trade

wide-spread education, free trade, and strong property rights

religious freedom, patents and copyrights, and government economic planning

strong industrial regulation, government economic planning, and restricted trade

Question 10

If an economy's production possibilities curve has shifted out, we can unambiguously conclude that:

the supply of natural resources increased

the supply of labor increased

potential GDP increased

technology improved