question

What sector of the economy is the ultimate supplier of all economic resources and simultaneously the major spender?

answer

-households

question

macroeconomics problems are usually examined from the ________ rather than the personal point of view.

answer

-social

question

Which of the following are economic goals?

answer

-economic growth and full employment

question

Which form of business is immortal?

answer

-corporation

question

Which of the following is NOT a pitfall to objective thinking in economics?

answer

-rational thinking

question

Marginal analysis deals with:

answer

-change in or the additional unit

question

What are the two fundamental facts which constitute the economizing problem?

answer

-unlimited needs and wants - scarce resources

question

What is the greatest disadvantage of both partnership and proprietorship?

answer

-unlimited liability

question

Which of the following is NOT one of the scarce resources studied?

answer

-money

question

Economics is the social science concerned with the problem of using or administering _____ resources to attain the greatest or maximum fulfillment of society's unlimited _____ and _______.

answer

-scarce - needs - wants

question

The slope of the line is constant at all levels of consumption.

answer

-TRUE

question

Resources are being efficiently allocated to any product when output is such that:

answer

-MC=MB

question

Does growth automatically make the quality of living better?

answer

-NO

question

The curve's concave shape is due to:

answer

-Law of Increasing Opportunity Cost

question

What direction does the flow of goods and services move between Business and Household?

answer

-Counter clockwise

question

What is the direction of flow of Costs, Revenue, and Consumption?

answer

-Clockwise

question

An institution or mechanism which brings together buyers and sellers of a particular good or service is called?

answer

-Market

question

A schedule which shows the various amounts of a product consumers are willing and able to purchase at each price in a series of possible prices during a specific period of time is called?

answer

-demand

question

A schedule which shows the various amounts of a product a producer is willing and able to produce and make available for sale at each price in a series of possible prices during a specific period of time is called?

answer

-supply

question

Which of the following would NOT be embraced in the framework of pure capitalism?

answer

-all resources owned by the government

question

What law was passed in 1890 to maintain competition?

answer

-Sherman act

question

Government purchases use or absorb resources. Which of the following government activities does not use resources?

answer

-transfer payments

question

What was the first medium of exchange used?

answer

-barter/trading

question

How does an economy or individual obtain more goods and services than it has revenue to cover?

answer

-borrowing

question

What drives the circular flow model?

answer

-pure profits

question

Consumer demand is registered by which of the following?

answer

-dollar votes

question

What is the correct order of the phases of the economic or business cycle?

answer

-peak, recession, trough, recovery

question

What allows us to keep tabs on the health of the economy and formulate policies which will maintain and improve that health?

answer

-national income accounting

question

The open-economy circular flow model connects the ______ economy to the rest of the ______

answer

-domestic, world

question

Specialization according to comparative advantage improves global resource allocation which increases global ______?

answer

-output

question

When a nation can produce some product at a lower domestic opportunity cost than can a potential trading partner it is called?

answer

-comparative advantage

question

What factor or factors helped to rapidly increase international trade since WWII?

answer

-Transportation technology, communication advances, decline in tariffs

question

What is the correct order of calculation of the following?

answer

-GDP, NDP, NI, PI, DI

question

If the inflation rate is 4% and there is a nominal wage increase of 3% during the same period, then the real income will have:

answer

-decreased

question

The period before 1930 that economists believed that the market system would ensure full use of the economy's resources is called:

answer

-classical economics

question

Capitalism is not a self-regulating system capable of uninterrupted prosperity and cannot be counted on to run itself. This is the view of what type of economic theory?

answer

-Keynesian economics

question

The real interest rate is:

answer

-nominal interest rate minus inflation

question

Bank reserves can be and are lost by ______ banks in the banking system, there can be no loss of reserves for the banking ______ as a whole.

answer

-individual - system

question

What are banks creating when loans are made?

answer

-money

question

What are banks and other depository institutions, that allow checkable accounts, required to keep?

answer

-required reserves

question

What is the circulating debt of the federal reserve banks?

answer

-paper money

question

What makes money valuable?

answer

-acceptability, legal decree, relative scarcity

question

Which of the following is not a timing problem in fiscal policy?

answer

-instability lag

question

The purposeful manipulation of government expenditures and tax collections by congress to promote full employment, price stability, and economic growth is called?

answer

-fiscal policy

question

An increase in consumer spending will shift the aggregate demand curve?

answer

-right

question

A decline in tax revenues resulting from an increase in tax rates is represented by the ____ curve.

answer

-laffer

question

Which of the following budget policies intensifies inflation?

answer

-annually balanced budget

question

Which of the following is NOT a cause of public debt?

answer

-reganomics

question

The united states the leading debtor nation in the world?

answer

-TRUE

question

Can the United states go bankrupt?

answer

-FALSE

question

An increase in productivity would ?

answer

-shift the aggregate supply curve right

question

Bank reserves can be and are lost by ______ banks in the banking system, there can be no loss of reserves for the banking _______ as a whole.

answer

-individual - system

question

The bulk of the money in our economy is created through the extension of credit by banks.

answer

-TRUE

question

What will a bank that has a check drawn on it lose?

answer

-reserves equal to the check amount and demand deposits equal to the check amount

question

What was the first organization that used the fractional reserve system?

answer

-goldsmiths

question

Banks balance profitability and prudence between _____ and _____.

answer

-earning profits - high liquid assets

question

Reserves are lost for the banking system as a whole when loans are made for less than required reserves

answer

-TRUE

question

What are banks creating when loans are made?

answer

-money

question

Commercial banks keep required reserves as:

answer

-cash in vault and federal reserve accounts

question

What are banks and other depository institutions that allow checkable accounts, required to keep?

answer

-required reserves

question

The amount by which a bank's actual reserves exceed required reserves is called?

answer

-excess reserves

question

When a bank accepts a checkable deposit it changes the ______ of the total money supply?

answer

-composition

question

Banks create money by :

answer

-offering credit cards

question

The total demand for money is the sum of transaction and ______ demands.

answer

-asset

question

Which of the following is NOT near money?

answer

-credit cards

question

What is the circulating debit of the federal reserve banks?

answer

-paper money

question

According to your book, what percent of the money supply is in coins?

answer

-2-3%

question

If the federal reserve is buying bonds, what is happening to the money supply?

answer

-increasing

question

Transactions made using checkable deposits account for the majority of all transactions?

answer

-TRUE

question

Which of the following is NOT a function of money?

answer

-measure of status

question

What makes money valuable?

answer

-acceptability, legal decree, relative scarcity

question

What is the federal reserve bank that services the North MS area?

answer

-St. Louis

question

Which of the following is the most important function of the federal reserve?

answer

-controlling the money supply

question

The discount rate is ?

answer

-the rate the federal bank charges commercial banks for overnight loans

question

If the federal reserve bank is selling bonds, increasing reserves, and increasing discount rates it would be engaged in what type of money policy?

answer

-tight money policy

question

If the money supply rises, excess reserves increase, and interest rates are falling this would most closely be what type of monetary policy?

answer

-easy money

question

What monetary policy is best used to combat inflation?

answer

-tight money

question

Which of the following is a strength of the monetary policy?

answer

-speed and flexibility

question

What is meant by the velocity of money?

answer

-how quickly a dollar is spent and the number of times it is spent in one year

question

Monetary policy is used primarily to impact what component of the aggregate expenditures model?

answer

-aggregate demand

question

The Phillips curve stated that there was a stable trade off between inflation and unemployment

answer

-TRUE

question

What is an aggregate supply shock?

answer

-rapid and significant increase in resource costs

question

The suggestion that higher tax rates may reduce total tax revenues is given by:

answer

-laffer curve

question

Our economy has NEVER experienced high inflation and high unemployment at the same time.

answer

-FALSE

question

What would be the effect on investment of a tight money policy?

answer

-decreased investment

question

Who is the current chairman of the federal reserve board of governors?

answer

-Janet yellen

question

Which of the following has been termed "the banker's bank"

answer

-federal reserve bank

question

The existence of a money multiplier is only fictional

answer

-FALSE

question

If personal taxes were decreased and input productivity increased simultaneously the equilibrium:

answer

-price level would necessarily fall and output would rise

question

Other things equal, an increase in productivity will shift the aggregate supply curve leftward.

answer

-FALSE

question

Rational expectations theory assumes that:

answer

-people behave rationally and that all product and resource prices are flexible both upward and downward

question

An increase in business excise taxes will shift the aggregate supply curve rightward.

answer

-FALSE

question

Fiscal policy is carried out primarily by:

answer

-the federal government

question

expansionary fiscal policy is so named because:

answer

-is designed to expand real GDP

question

The major component of the money supply is:

answer

-checkable deposits

question

Money market deposit accounts are included in:

answer

-M2 only

question

Checkable deposits include:

answer

-demand deposits of banks and thrifts

question

The asset demand for money:

answer

-varies inversely with the rate of interest

question

Its is costly to hold money because:

answer

-in doing so sacrifices interest income

question

Banks destroy money when they:

answer

-fail to reissue loans, which are paid off

question

Commercial bank reserves are an asset to commercial banks but a liability to the federal reserve bank holding them.

answer

-TRUE

Macroeconomics Final Review Test Questions – Flashcards

Unlock all answers in this set

Haven't found what you were looking for?

Search for samples, answers to your questions and flashcards