Macroeconomics Final Exam – Flashcards
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Why doesn't the Phillips curve represent a permanent trade-off between unemployment and inflation in the long run?
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...
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What two institutions did Congress create in order to increase the availability of mortgages in a secondary market?
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Fannie Mac and Freddie Mac
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When the FOMC decides to increase the money supply, it ___ etc.
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buys;sells
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Which of the following is not a correct statements about M2?
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M2 is the best definition of money as a medium of exchange. increase by 100; remain the same
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The figure to the right illustrates a dynamic AD-AS model. Suppose the economy is in equilibrium...AD2 policy and reach equilibrium(point C) in the second period?
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OPEN MARKET
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In the figure to the right, expected inflation is initially at 1.5%...4.5%...
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... ALL OF THE ABOVE
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In the figure to the right, the opportunity cost of holding money ____ when moving from Point A to Point B on the money demand curve.
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...DECREASES
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According to many economists and policymakers, what other options does the Fed have to improve its credibility with workers, firms, and investors
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...ALL OF THE ABOVE
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Alan Greenspan -
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...
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West Paragon, a developed economy
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...
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In a real business cycle model, which of the following best explains an increase in real GDP above the full-employment level?
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...
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When the Fed uses monetary policy targets, they cannot use both a money supply target and an interest rate target at the same time
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interest rates are determined by money supply
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The m2 definition of the money supply includes
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...m1, and money markets
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Which of the following is not one of the monetary policy goals of the Fed?
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...Low prices??
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Evaluate the following statement. Banks use deposits to make consumer loans to households and commercials loans to businesses. Banks will...
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False. Banks must hold a fraction
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The ______________ is considered the most relevant interest rate when conducting monetary policy.
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...
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The average number of times each dollar in the money supply is used to purchase goods and services is called
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...
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Which of the following is true with respect to hyperflation?
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ALL OF THE ABOVE
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What are the Fed's main monetary policy targets?
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The money supply and interest rates.
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All of the following are arguments against an explicit inflation targeting for monetary policy except
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...
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The (FOMC) // The Federal Reserves Bank of NY is always a voting member bc
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...
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The U.S. dollar can best be described as
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fiat money
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The use of money
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ALL OF THE ABOVE
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In 2008, the required reserve ratio for a bank's first
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Less...
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What effect does expansionary monetary policy have on equilibirum if consumers have rational expectations?
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a movement from point a to c
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According to the real business cycle models,
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...
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In the figure to the right, at what point is the inflation rate stable? That is, at what point refer ...
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point c
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When SRAS 1, shifts to SRAS 2, the price level increases and the level of real GDP falls. What happens to the short-run Phillips curve when the short-run aggregate supply...
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shifts up'higher level
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As a central bank has greater independence from the government, the economy's inflation rate tends to...
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...
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The federal reserve has multiple economic goals// which is not true
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...
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According to the quantity theory of money, inflation results from which of the following?
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The money supply grows faster than the real GDP
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Which of the following is not an issue with using active monetary policy to reduce business cycles?
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...
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As of 1993, the Fed sets targets for which of the following in order to achieve price stability and high employment?
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federal funds rate
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The natural rate of unemployment is the unemployment rate in which the inflation rate has no tendency to increase or decrease
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changes in the money supply
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Paul Volcker is credited largely with which of the following
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...
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During the expansion and deflation of the housing bubble, house price rose by
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...
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Monetary policy is defined as
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the actions the federal reserve takes to manage?
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West paragon
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...
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In the securitization process,
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...
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The economic definition of money is
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any asset...
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In addition to the federal reserve bank, what other economic factors influence the money supply
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households, firms. etc
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An increase in the money supply in the U.S. will not
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...
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If actual inflation is higher than expected inflation, the
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ACTUAL REAL WAGE IS LESS THAN THE EXPECTED REAL WAGE; UNEMPLOYMENT FALLS
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Economists who believed that the Phillips curve represented
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a permanent trade-off
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What is the Fed doing to increase the credibility of its policies?
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A AND B
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M1 includes more than just currency because...
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people hold money as other stores of value such as savings or other assets can also be used // many u.s. dollars are held outside of the country by foreigners
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Indicate the two main objections to the idea that the short-run phillips curve
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workers and terms//contracts
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the figure to the right illustrates
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AN OPEN MARKET
