question

What if savings and investment were not equal?

answer

Which question did John Maynard Keynes pose for the classical economists?

question

the classical economists

answer

Our economy is always tending towards full employment according to

question

Savings = investment and aggregate demand = aggregate supply.

answer

At equilibrium GDP

question

the classicals, but not by Keynes.

answer

Laissez-faire economics was advocated by

question

supply creates its own demand.

answer

Say's law states that

question

spend.

answer

People work, according to Jean Baptiste Say, so that they can

question

interest rates will rise and savings will rise

answer

According to the classical economists, if the amounts of money people are planning to invest is greater than the amount that people want to save,

question

government spending programs.

answer

Each of the following supports the classical theory of employment except

question

We will occasionally have some unemployment, but our economy will automatically move back toward full employment.

answer

Which best describes the classical theory of employment?

question

a rare occurrence

answer

Keynes considered full employment GDP to be

question

are very similar

answer

The Keynesian and classical aggregate supply analyses

question

is equal to; is equal to

answer

At equilibrium GDP, aggregate demand _______ aggregate supply and savings _______ investment.

question

spend a lot of money.

answer

To fight a depression, Keynes said that the government should

question

sums up Say's law

answer

The notion that everything the economy produces is purchased

question

full employment was the natural state of the economy and that government should not interfere with the private market forces of supply and demand.

answer

Classical economics was based upon the belief that

question

large unions and businesses resist wage and price cuts and lower wages mean decreased incomes and consumer spending.

answer

Keynesian economics finds fault with the classical economic argument that wage and price flexibility would guarantee full employment because

question

is primarily demand-oriented

answer

Keynesian theory

question

the Keynesians

answer

"The economy can be in equilibrium, with aggregate supply equal to aggregate demand, at a level substantially below the full employment level of output." This statement best describes the views of

question

if unemployment appears, it would soon disappear because of a reduction in interest rates, wages, and prices.

answer

According to the classical economists

question

a collapse in aggregate demand

answer

The principal cause of the Great Depression of the 1930s was

question

All of the choices are true of classical employment theory.

answer

Classical employment theory holds that

question

flexible interest rates, wages, and prices would assure full employment

answer

Classical economists believed that

question

would be reduced by a decrease in interest rates, wages, and prices.

answer

According to the classical economists, an increase in unemployment

question

demand creates its own supply.

answer

The Keynesian point of view suggests that

question

are signals to business firms to increase or cut production.

answer

Unintended inventory changes

question

the money supply.

answer

Fiscal policy deals with each of the following, except

question

equilibrium GDP is smaller than full employment GDP

answer

There is a recessionary gap when

question

both deficits and surpluses.

answer

Over the last four decades we have had

question

They have helped smooth out the business cycle

answer

Which statement is true about automatic stabilizers?

question

Both statements are true.

answer

Statement I: The federal budget deficit more than doubled between 1987 and 1992. Statement II: High federal budget deficits tend to push up real interest rates.

question

corporate after-tax profits.

answer

When there is a recession, the biggest percentage decline would be in

question

the unemployment insurance program.

answer

Each of the following is an example of discretionary fiscal policy except

question

4

answer

If equilibrium GDP is $1 trillion greater than full employment GDP, and there is an inflationary gap of $250 billion, the multiplier is

question

1986.

answer

The national debt passed the $2 trillion mark in

question

Over 50 percent of the outstanding public debt is owed by foreigners

answer

Which statement is true?

question

weak aggregate demand.

answer

In the 1930s, John Maynard Keynes said that our main economic problem was

question

interest on the debt; because interest payments keep rising, our deficits keep growing, further pushing up the debt.

answer

Which statement is true?

question

Over $8 trillion

answer

Right now our national debt is

question

rose substantially

answer

Between fiscal years 1989 and 1992, our federal budget deficit

question

fell substantially.

answer

In the mid-1990s, the federal budget deficit

question

raise interest rates.

answer

Large budget deficits tend to

question

the inflow of funds from foreigners

answer

Interest rates in the United States would have been higher in recent years had it not been for

question

a budget deficit.

answer

When government expenditures in a given year exceed tax receipts, there exists

question

The tendency of tax collections to fall as the economy moves into a recession.

answer

An illustration of the term "automatic stabilizer" is provided by

question

there is definitely a recessionary gap.

answer

If full employment GDP is $8 trillion and equilibrium GDP is $7 trillion

question

income is re-spent

answer

The reason the multiplier is greater than 1 is that

question

we could spend our way out of the Great Depression

answer

John Maynard Keynes believed that

question

a budget surplus

answer

When government expenditures in a given year are less than tax receipts, there exists

question

$10.7 trillion

answer

Suppose the deficit in the year 2010 is $500 billion; in the year 2011 it falls to $200 billion. If the national debt at the beginning of year 2010 is $10 trillion, how much will it be at the end of year 2011?

question

are probably insufficient to completely offset strong recessionary pressures.

answer

Automatic stabilizers

question

are used to make expected expenditures.

answer

The transaction motive for holding money

question

It would be falling.

answer

Suppose a goldsmith (banker) had a certain number of gold coins in his safe and he kept writing more and more goldsmiths' receipts for people who came to him to borrow money. What would be happening to his reserve ratio?

question

inflation.

answer

John Maynard Keynes said that people have three motives for holding money. Each of the following is a Keynesian motive except

question

10

answer

All large financial institutions have to hold a reserve of almost ___% of their demand deposits.

question

varies directly with the interest rate.

answer

The opportunity cost of holding money

question

Credit cards

answer

Which is NOT considered money?

question

a medium of exchange.

answer

If a person writes a check on a Tulsa bank to purchase a new Oldsmobile, he is employing money as:

question

Passbook savings account

answer

Which of the following is most unlike the others?

question

falling interest rates

answer

Each of the following hurt the savings and loan industry in the 1980s except

question

rises

answer

As the interest rate declines the amount of money the public wishes to hold

question

falls as the interest rate rises.

answer

The demand for money schedule shows that the quantity of money that people want to hold

question

They had a reserve ratio that was too low.

answer

What led to the bankruptcy of many goldsmiths?

question

M1 is part of M2, and M2 is part of M3.

answer

Which is true?

question

medieval times.

answer

Banking began in

question

Gold

answer

Which one of the following is not part of our money supply?

question

Gold

answer

Which one of the following is not money?

question

in goldsmiths' safes.

answer

Back in the Middle Ages, the only safe place to put your money was

question

the price level rises and credit availability falls.

answer

People tend to hold more money as

question

about $200 billion.

answer

The S & L debacle will ultimately cost American taxpayers

question

included in both M1 and in M2.

answer

Coins in the hands of the public are

question

John Maynard Keynes

answer

The concept of the liquidity trap was formulated by

question

M1.

answer

The most narrow definition of the money stock developed by the Federal Reserve System in the United States is

question

riskier; higher

answer

In the early 1980s the savings and loan associations started making _____ loans and paying their shareholders _____ interest rates.

question

Citigroup is the largest American bank

answer

Which statement is true?

question

M2 + large denomination time deposits = M3.

answer

Which statement is true?

question

equal to total reserves minus excess reserves

answer

Required reserves are

question

the Federal Reserve District Bank in Minneapolis.

answer

A woman in Duluth, Minnesota, bought tickets to a Minnesota Vikings game. Her check was deposited in a bank in Minneapolis. From there it went directly to

question

All of the choices are correct

answer

The purpose of establishing the Federal Reserve System was

question

Our central bank was formed in 1913.

answer

Which statement is true?

question

sell securities on the open market

answer

When there is a great deal of inflation the Fed will

question

12

answer

The Federal Open Market Committee has _____ members.

question

buys U.S. government securities.

answer

When the Fed wants to increase the money supply it

question

a high price and drives down interest rates.

answer

In order to buy securities the Fed offers

question

1913.

answer

The United States did not have a central bank until

question

1980.

answer

All of the nation's financial institutions came under the jurisdiction of the Federal Reserve in

question

the president of the United States.

answer

The Federal Open Market Committee is made up of all of the following, except

question

the Federal Reserve

answer

The rate of growth of our money supply is controlled by

question

depositors attempting to withdraw more deposits than the banks held in reserve

answer

Bank panics were the result of

question

None of the statements are true.

answer

Which statement is true?

question

7; 14

answer

There are _____ members of the Board of Governors of the Federal Reserve; each serves one _____ year term.

question

serve on the Board at the pleasure of the President, who can make individual governors resign at any time

answer

The Board of Governors of the Federal Reserve does each of the following, except

question

None of the statements are true about the Fed's Governing Board.

answer

Which statement is true about the Fed's Governing Board?

question

control the rate of growth of the money supply.

answer

The main job of the Fed is to

question

Insuring bank deposits

answer

Which is not a job of the Federal Reserve?

question

the Federal Reserve.

answer

Our currency is issued by

question

Chairman of the Federal Reserve Board

answer

The most powerful individual in the Federal Reserve System is the

question

both the President and Congress.

answer

The Board of Governors of the Federal Reserve is independent of

question

The United States has had a central bank since 1913

answer

Which statement is true?

question

the president.

answer

The members of the Board of Governors are appointed by

question

Actual reserves - required reserves = excess reserves.

answer

Which statement is true?

question

The less developed countries

answer

In which countries of the world has Malthus's prediction come closest to being true?

question

LDCs

answer

India and China are

question

research and development spending

answer

Each of the following EXCEPT ______________ slowed our rate of economic growth in the 1970s and early 1980s.

question

Thomas Robert Malthus

answer

The theory of population of _____ predicted that the world's population would increase faster than the food supply.

question

sub-Saharan Africa.

answer

The Malthusian theory appears to be coming true in

question

steam engine.

answer

One of the basic innovations of the first phase of the industrial revolution was (the)

question

1,000 less hours a year.

answer

Compared to 1870, the average worker today in the United States, Britain, France, Germany, and Japan works about

question

The average American worker puts in more hours on the job than the average Japanese worker.

answer

Which statement is true?

question

immigration.

answer

Each of the following has lowered our rate of economic growth except

question

the population doubled every 25 years

answer

Thomas Robert Malthus said that

question

geometric; arithmetic

answer

The Malthusian theory said that population tended to grow in a(n) _____ progression, while the food supply tended to grow in a(n) _____ progression

question

Thomas Malthus.

answer

The theory that our population would grow too quickly relative to our food supply is associated with

question

was confined to Europe, the United States, Canada, Australia, New Zealand, and Japan until the mid-20th century.

answer

The first Industrial Revolution

question

NIC.

answer

Brazil should be classified as a(n)

question

About 16 percent of our GDP goes toward health care

answer

Which of the following statements is TRUE?

question

the world's population tends to grow geometrically

answer

According to Malthusian population theory,

question

second

answer

The age of mass production, which began in the United States during the early years of the 20th century, was the ______ phase of the Industrial Revolution.

question

1800

answer

During a year, the average American worker puts in about _____ hours on the job.

question

second

answer

Mass production of automobiles, electrical machinery, and steel was a feature of the ________ phase of the industrial revolution

question

started in America in the 1920s with the mass production of cars and electrical machinery.

answer

The second phase of the Industrial Revolution

question

1750

answer

The industrial revolution began around the year _____.

question

1920

answer

The age of mass consumption truly began around

question

the United States

answer

The nation whose workers work more hours per year than any other industrial nation is

question

Americans work more hours than the citizens of virtually every other developed country.

answer

Which is the most accurate statement?

question

the LDCs.

answer

Most of the world's population lives in

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