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