试卷详情
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经济学:世界经济分析
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[单项选择]The major advantage of automatic stabilizers is that:()
A. they institute crowding out policy without the delays associated with policy changes that require legislative action.
B. they institute countercyclical fiscal policy without the delays associated with policy changes that require legislative action.
C. they institute cyclical fiscal policy without the delays associated with policy changes that require legislative action.
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[单项选择]For an economy operating at full employment, if actual inflation is less than expected inflation, what will most likely be the effects on the unemployment rate in the short run and in the long run Short run Long run()①A. Increase Increase ②B. Decrease No effect ③C. Increase No effect
A. ①
B. ②
C. ③
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[单项选择]Which of the following statements about achieving proper timing in fiscal policy is FALSE()
A. Improvements in quantitative methods have made the occurrence of recessions or expansions quite predictable.
B. There is usually a time lag between when a change in policy is needed and when the need is recognized by policy makers.
C. The time required to change tax laws and government expenditure programs can be lengthy.
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[单项选择]The crowding-out model suggests that the stimulus effect of increased government expenditures will be modified by changes in real interest rates and the flow of foreign financial capital, be cause real interest rates will:()
A. rise and inflows of financial capital from outside the country will increase.
B. rise and inflows of financial capital from outside the country will decrease.
C. fall and inflows of financial capital from outside the country will increase.
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[单项选择]Based on research that has been done regarding the relationship between deficits and interest rates it can be concluded that:()
A. year-to-year data indicate a strong relationship between budget deficits and interest rates but over a more lengthy period, persistently large budget deficits do lead to higher interest rates as implied by the crowding-out model.
B. year-to-year data indicate a loose relationship between budget surpluses and interest rates but over a more lengthy period, persistently large budget deficits do lead to higher interest rates as implied by the crowding-out model.
C. year-to-year data indicate a loose relationship between budget deficits and interest rates but over a more lengthy period, persistently large budget deficits do lead to higher interest rates as implied by the crowding-out model.
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[单项选择]Frictional unemployment results from:()
A. inflexible wages in the marketplace.
B. recessionary business conditions and inadequate aggregate demand for labor.
C. constant changes in the economy that prevent qualified unemployed workers from being immediately matched up with existing job openings.
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[单项选择]The nominal risk-free rate of interest equals the real risk-free rate:()
A. minus expected inflation.
B. plus actual inflation.
C. plus expected inflation.
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[单项选择]Which of the following are problems in measuring unemployment () Ⅰ. In order to be classified as unemployed, one must be looking for a job Ⅱ. People may be busy but their activities are outside the market labor force Ⅲ. Unemployed workers who are seeking work are included in the labor force along with employed workers
A. Ⅰ only.
B. Ⅱ only.
C. all of the above.
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[单项选择]Which one of the following is NOT a major prediction of the effects of monetary policy()
A. The inflation rate and money interest rates are directly related.
B. Inflation will remit from the rapid and persistent growth of the money supper.
C. There is a strict relationship between shifts in monetary policy and changes in output and prices.
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[单项选择]Restrictive fiscal policy involves:()
A. higher taxes and increased government spending.
B. higher taxes and reduced government spending.
C. lower taxes and increased government spending.
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[单项选择]To be useful, a measure of inflation for an economy would most likely reflect information about the change in prices of:()
A. goods only.
B. goods and services only.
C. goods, services, and financial assets only.
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[单项选择]Which of the following statements best explains the importance of the timing of changes in discretionary fiscal policy Changes in discretionary fiscal policy must be timed properly if they are going to:()
A. help the government achieve a balanced budget.
B. exert a stabilizing influence on an economy.
C. enable the government to control the money supply.
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[单项选择]Edmund Jones, an economist, recommends that the federal government consider reducing its budget deficit during a recession by raising income taxes with no other fiscal policy changes. Jones’ income tax increase recommendation will most likely have the following effects on the supply of labor and on potential GDP Supply of labor Potential GDP()①A. Decrease Decrease ②B. Decrease Increase ③C. Increase Decrease
A. ①
B. ②
C. ③
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[单项选择]At a recent conference "The Fed -Where is it Going", Jason Alexdrovitch was discussing the policy tools that the U.S. central bank uses to control the money supply. During the conference he made the following statements: Statement 1: If the Fed wanted to use all of its three major monetary policy tools to increase the money supply, the Fed would sell bonds, reduce the discount rate and increase bank reserve requirements. Statement 2: If commercial banks are increasing their borrowings from the Federal Reserve banks, while the Fed is selling government securities, the borrowing of the commercial banks from the Fed will offset the effects of open market operations. Are Statement 1 and Statement 2 as made by Alexdrovitch correct Statement 1 Statement ()①A. Incorrect Incorrect ②B. Incorrect Correct ③C. Correct Incorrect
A. ①
B. ②
C. ③
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[单项选择]According to Economics Theory, Challenges to implementing a discretionary fiscal stimulus in a timely manner are least likely to include the:()
A. government payments for unemployment benefits.
B. need to convince lawmakers that action must be taken.
C. inability of policymakers to forecast a recession precisely.
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[单项选择]Which one of the following Federal Reserve monetary policies, when pursued in line with the U. S. government’s fiscal policies, would help increase aggregate demand during a period of high unemployment()
A. An increase in the reserve requirements for financial institutions.
B. A decrease in the discount rate.
C. An increase in the margin requirements at brokerage firms.
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[单项选择]The public decides to decrease its holdings of currency and to increase its holdings of checking account funds by an equal amount. If the Federal Reserve does not take any offsetting actions, how will the money supply be affected ()
A. The money supply will decrease.
B. Although the action does not directly affect the money supply, it will reduce the excess reserves of banks and tend to indirectly reduce the money supply.
C. The action does not directly affect the money supply; it will increase the excess reserves of banks and tend to increase the money supply because banks may expand their loans.
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[单项选择]If the effects are fully anticipated, what impact is expansionary monetary policy most likely to have on real economic activity()
A. Little or no impact.
B. Large expansionary impact.
C. Moderate expansionary impact.
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[单项选择]Which of the following is least likely to be cited as a limitation of discretionary fiscal policy stabilizers()
A. Changes in the business cycle are difficult to predict.
B. Taxes paid by households increase as incomes rise.
C. Legal changes are delayed while legislators debate fiscal policy issues.
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[单项选择]On January 3, Logan Industries deposited $1000000 in cash at Federal Savings Bank. No excess reserves were present at the time Logan made the deposit and the required reserve ratio is 10%. What is the maximum amount by which Federal Savings Bank can increase its lending()
A. $100000.
B. $1000000.
C. $900000.
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[单项选择]Which one of the following is least accurate with regard to money serving as a medium of exchange Without money to serve as a medium of exchange:()
A. people’s standard of living would probably decline.
B. people would continue to enjoy their current standard of living and countries would become more self-sufficient in production of goods and services.
C. the transaction cost of exchange would increase.
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[单项选择]Which of the following statements concerning inflation is least accurate()
A. Inflation tends to erode the purchasing power of a currency.
B. There are two fundamental types of inflation, demand-pull and cost-push.
C. Anticipated changes in inflation have greater impacts on real economic outcomes than unanticipated changes.
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[单项选择]Which of the following fiscal policy models is most likely to support the conclusion that the adjustment of money wages to restore full-employment equilibrium is rapid and that without the distorting effects of taxes, long-run equilibrium real output would increase with increases in the labor force and accumulated capital, and with improvements in technology()
A. Classical.
B. Keynesian.
C. Supply-side.
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[单项选择]Which of the following is least likely to result from an increase in the rate of growth in the money supply()
A. A higher nominal risk-flee rate.
B. A higher real risk-free rate.
C. Higher expected inflation.
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[单项选择]If the central bank unexpectedly shifts to a more restrictive monetary policy, the most likely effect()
A. an increase in real interest rates.
B. a decrease in real interest rates
C. an increase in asset prices.
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[单项选择]If a central bank wants to implement expansionary monetary policy, how would the central bank use the following monetary tools Reserve Requirements Open Market Operations Discount Rate()①A. Lower Buy additional government securities Lower ②B. Lower Sell previous purchased government securities Raise ③C. Raise Sell previous purchased government securities Raise
A. ①
B. ②
C. ③
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[单项选择]An analyst calculating the unemployed rate is most likely to classify as unemployed persons who are:()
A. retired.
B. not looking for work.
C. temporarily laid off from a job.
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[单项选择]U.S. banks will generally opt to hold excess reserves if they believe general business conditions in the U.S. economy are subject to greater uncertainty. If all else is held constant, what is the most likely impact of this action()
A. The money supply will decrease.
B. The money supply will increase during a period of inflation, but will decrease if the economy goes into a recession.
C. There will be no effect on the money supply.
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[单项选择]Which of the following are four phases of the typical business cycle()
A. Peak, boom, bust, and recession.
B. Peak, expansion, recession, and stability.
C. Peak, contraction, recessionary trough, and expansion.
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[单项选择]Which of the following is NOT a source of adverse effects of inflation on an economy Inflation: ()
A. distorts the information delivered by prices.
B. affects product prices without changing underlying resource prices, such as wages, in the long run.
C. increases the uncertainty accompanying investment and other activities involving future payments.
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[单项选择]For an economy operating at full employment, the major long-term impact of increasing the money supply will be:()
A. lower interest rates.
B. higher output.
C. higher prices.
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[单项选择]An increase in which one of the following monetary measures would best complement fiscal measures that are designed to stimulate aggregate demand during a period of high unemployment()
A. Reserve requirements.
B. Treasury securities held by the Federal Reserve.
C. The Federal Reserve’s discount rate.
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[单项选择]The quantity theory of money states that:()
A. a decrease in the money supply will cause a proportional increase in prices.
B. monetary and fiscal policy must be used in tandem.
C. an increase in the money supply will cause a proportional increase in prices.
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[单项选择]If firms and households decide to reduce their currency holdings and increase their holdings of funds in their checking accounts by an equal amount, what will be the impact on the money supply if the U.S. Federal Reserve does not undertake any offsetting actions()
A. There will be no direct or indirect impact on the money supply because the decrease in currency holdings will be exactly offset by the increase in the funds in the checking accounts.
B. There will be no direct impact on the money supply, however, banks’ excess reserves will decrease, which will cause them to decrease their loans, thereby leading to an indirect decrease in the money supply.
C. There will be no direct impact on the money supply. However, banks’ excess reserves will increase, which will enable them to increase their loans, thereby leading to an indirect increase in the money supply.
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[单项选择]The term "automatic stabilizers" refers to the fact that:()
A. legislators automatically change the tax structure and expenditure programs to correct upswings and downswings in business activity.
B. with given tax rates and expenditure policies, a rise in national income tends to produce a surplus, while a decline tends to result in a deficit.
C. government expenditures and tax receipts automatically balance over the course of the business cycle, although they may be out of balance in any single year.
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[单项选择]Growth of real GDP in the Czech Republic is at a historically low level. An economic summit in Prague invited the leading economists to pose a solution to the declining economic situation. Many of the economists in attendance subscribe to supply side economic theory. Their solution is to reduce the incredibly high marginal tax rate of 68% to 35%. The primary benefit of such a policy is:()
A. higher levels of disposable income and ability to consume goods and services leading to higher GDP.
B. greater incentive for individuals to spend-their income on tax-deductible luxury items.
C. increased incentive for domestic investment leading to increased aggregate supply and GDP.
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[单项选择]Which of the following most accurately describes the generational effects of fiscal policy()
A. Fiscal stimulus generates economic activity greater than the amount of the stimulus due to the multiplier effect on future generations.
B. Each generation of fiscal policy decisions has unintended effects that require another generation of fiscal policy actions to correct them.
C. Fiscal imbalances must be corrected in the future by increasing taxes or decreasing government spending, and much of the burden will fall on future generations.
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[单项选择]Changes in which of the following are likely to affect interest rates () Ⅰ. Inflation expectations Ⅱ. Size of the federal deficit Ⅲ. Money supply
A. Ⅰ and Ⅱ only.
B. Ⅱ and Ⅲ only.
C. Ⅰ, Ⅱ, and Ⅲ.
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[单项选择]Which school of thought holds that fiscal policy is most effective()
A. the basic Keynesian model.
B. the Crowding-Out model.
C. New Classical economics.
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[单项选择]In the long run, when the economy is at full employment, will a decrease in the quantity of money due to restrictive monetary policy that brings a decrease in aggregate demand likely result in: the price level real GDP()①A. No No ②B. No Yes ③C. Yes No
A. ①
B. ②
C. ③
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[单项选择]Which of the following relationships in regard to the equation of exchange is least accurate()
A. Nominal GDP = (Price) (Real Output).
B. Nominal GDP = (Money Supply) (Velocity) = (Price) (Real Output).
C. Nominal GDP = (Price) (Money Supply).
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[单项选择]The Phillips curve shows the trade-off between:()
A. the rate of change in the money supply and the rate of change in employment.
B. nominal interest rates and real interest rates.
C. inflation and unemployment.
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[单项选择]The change in the quantity of money is determined jointly by the:()
A. change in the monetary base and the Fed’s required reserve ratio.
B. Fed’s required reserve ratio and the money multiplier.
C. change in the monetary base and the money multiplier.
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[单项选择]The U.S. Federal Reserve System buys $10 million of government securities from the public, the reserve requirement is 20 percent, and all banks have zero excess reserves. A few weeks later, if no excess reserves still exist, the total impact of this action on the money supply will be a:()
A. $ 50 million increase.
B. $ 2 million increase.
C. $ 2 million decrease.
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[单项选择]The crowding-out effect suggests that:()
A. expansionary fiscal policy leads to inflation.
B. restrictive fiscal policy is an effective weapon against inflation.
C. greater government deficits will drive up interest rates, thereby reducing private investment.
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[单项选择]Which of the following is least likely an automatic stabilizer()
A. Property taxes.
B. Corporate profit taxes.
C. Unemployment compensation.
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[单项选择]The effectiveness of a monetary or fiscal policy change in combating inflation depends on the level of anticipation (i. e. credibility) the policy change has with the financial markets. Assume that the U. S. economy is currently in long-run economic equilibrium but suffering with unacceptably high inflation, which the Federal Reserve is determined to fight. The Fed could make either an unexpected or an anticipated policy change to reduce inflation. Describe the likelihood of a recession occurring as a result of either type of policy change. Unexpected policy change Anticipated policy change()①A. Recession likely Recession likely ②B. Recession likely Recession unlikely ③C. Recession unlikely Recession likely
A. ①
B. ②
C. ③
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[单项选择]On a particular day the Wall Street Journal reports that the 91-day on-the-run U. S. Treasury bill is yielding 6 percent and the 30-year on-the-run U. S. Treasury bond is yielding 8 percent. In the market, default risk premiums average 2 percent, maturity risk premiums average 2 percent and liquidity risk premiums average 1 percent. If expected inflation is 3 percent, the real risk free rate of interest is:()
A. -2%.
B. 0%.
C. 3%.
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[单项选择]When an economy is in an economic expansion, automatic stabilizers will tend to alter government spending and taxation so as to:()
A. ensure that the budget will remain in balance.
B. reduce the budget deficit (or increase the surplus).
C. enlarge the budget deficit (or reduce the surplus).
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[单项选择]Which of the following is determined by the equilibrium between the demand for money and the supply of money()
A. Inflation rate.
B. Interest rate.
C. Money supply.
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[单项选择]Which of the following items is least likely to be included in the monetary base()
A. Commercial checking deposits.
B. Federal Reserve notes.
C. Coins issued by the Treasury.
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[单项选择]What would be the impact of an unanticipated increase in aggregate demand on an economy’s rate of unemployment, rate of inflation, and the short-run Phillips curve (SRPC) Unemployment Inflation SRPC()①A. Decrease Increase Upward movement along curve ②B. Increase Increase Downward movement along curve ③C. No effect Decrease Upward shift of curve
A. ①
B. ②
C. ③
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[单项选择]Which of the following statements about the basic functions of money is TRUE()
A. When money is defined as a medium of exchange, it means that money enables value to be stored and transported.
B. Money’s value is directly related to the level of prices.
C. Money’s function as a unit of account allows individuals to account for debts.
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[单项选择]Michael Vincent and Elizabeth Matthews, economists at Macro Associates, conduct research into the effects of fiscal policy on the economy. Vincent states that government taxing decisions affect the supply of labor. Matthews contends that government taxing decisions affect potential GDP. Regarding the statements made by Vincent and Matthews: Vincent Matthews()①A. Correct Incorrect ②B. Incorrect Correct ③C. Correct Correct
A. ①
B. ②
C. ③
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[单项选择]The development most likely to lead to an increase in the velocity of money is:()
A. a decrease in money interest rates resulting from restrictive fiscal policy.
B. an increase in the expected rate of inflation.
C. a sharp decline in the use of credit cards.
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[单项选择]The short-run relationship between unexpected inflation and:()
A. unemployment is positive.
B. unemployment is negative.
C. actual inflation is positive.
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[单项选择]The impact of higher rates of inflation in the long run on real interest rates and on nominal interest rates is: Real rats Nominal rates()①A. Increase Increase ②B. Increase No change ③C. No change Increase
A. ①
B. ②
C. ③
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[单项选择]Assume the economy is undergoing a recession. In its efforts to stimulate the economy by trying to influence short-term interest rates the Fed is most likely to take which two actions()
A. Sell Treasury securities and increase bank reserve requirements.
B. Buy Treasury securities and decrease bank reserve requirements.
C. Buy Treasury securities and increase bank reserve requirements.
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[单项选择]If the velocity of money is increasing at a rate of 1 percent per year and real GDP is increasing at 2%, a 4% increase in the money supply will lead to:()
A. 6% inflation.
B. 5% inflation.
C. 3% inflation.
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[单项选择]Which of the following statements about the demand and supply of money is most accurate People who are:()
A. buying bonds to reduce their money balances will increase the demand for bonds with an associated increase in interest rates.
B. selling bonds to increase their money balances will reduce the demand for bonds with an associated reduction in interest rates.
C. holding money when interest rates are higher will try to reduce their money balances and, as a result, the demand for money decreases.
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[单项选择]David Wildstein, Harry Osajnuk, and Kurt Weil, are all junior economists at the Bank of Scarsdale. Over lunch they were discussing the U.S. Federal Reserve (the Fed) and the banking system in the United States. They made the following statements regarding the overall purpose of the Federal Reserve System: Wildstein: In my opinion, the overall purpose and goal of the Federal Reserve System is to insure the deposits of individuals and firms holding funds with banking institutions. Osajnuk: The overall goal of the Federal Reserve System is to keep the discount rate flexible so that if additional funds are needed in the economy the discount rate will be reduced and if there is too much money in the economy the discount rate will be increased. Weft: The primary purpose of the Federal Reserve System is to regulate the amount of excess reserves held by member banks through the potential deposit expansion multiplier. Are the statements made by Wildstein, Osajnuk, and Weil correct Wildst
A. ①
B. ②
C. ③
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[单项选择]Automatic stabilizers work by:()
A. initiating changes in monetary policy without requiring action by the central bank.
B. instituting counter-cyclical fiscal policy without the delays associated with policy changes that require legislative action.
C. adjusting interest rates without the delays associated with policy changes that require action by the central bank.
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[单项选择]Which of the following is the most accurate with regard to the result of banking deregulation that occurred in the U.S. during the 1980s()
A. There is a clearer distinction between the functions of commercial banks on the one hand and thrift institutions on the other.
B. Different types of depository institutions are now more similar in the products and services that they provide.
C. Interest-bearing checkable deposits are no longer a major part of the M1 money supply.
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[单项选择]In the short run, the impact of an increase in the money supply on the price level and real output will be: Price level Real output() ①A. Increase Increase ②B. Increase No change ③C. No change Increase
A. ①
B. ②
C. ③
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[单项选择]When an economy dips into a recession, automatic stabilizers will tend to alter government spending and taxation so as to:()
A. reduce the budget deficit (or increase the surplus).
B. enlarge the budget deficit (or reduce the surplus).
C. ensure that the budget will remain in balance.
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[单项选择]ff the economy is just beginning to come out of a recession, which of the following would represent a typical sequence of phases in the business cycle()
A. Expansion, business peak, contraction, recessionary trough.
B. Expansion, business peak, recessionary trough, contraction.
C. Depression, expansion, business peak, contraction.
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[单项选择]The demand for money curve represents the relationship between the quantity of money demanded and:()
A. the quantity of money supplied.
B. short-term interest rates.
C. the price level.
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[单项选择]In the short run, when there is excess capacity in the economy, an unanticipated increase in the money supply will initially exert its primary impact on:()
A. output and employment rather than on prices.
B. inflation, particularly if excess capacity is present.
C. interest rates because rising interest rates will stimulate additional savings.
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[单项选择]Medium of exchange can be defined as:()
A. an asset that will allow people to transfer purchasing power form one period to the next.
B. an asset that can be easily and quickly converted to purchasing power without loss of value.
C. an asset that is used to buy and sell goods or services.
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[单项选择]Assume that the reserve requirement is 20 percent and banks currently have no excess reserves. If excess reserves stay at zero and the Federal Reserve buys $100 million of Treasury bills from the public, the money supply would increase by:()
A. $20 million.
B. $100 million.
C. $500 million.
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[单项选择]Open market purchases:()
A. inject additional reserves into the banking system and increase the money supply.
B. inject additional reserves into the banking system and decrease the money supply.
C. remove reserves into the banking system and increase the money supply.
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[单项选择]Given the hypothetical information below about the conditions in the labor market, what is the unemployment rate Employed 177000 Discouraged workers 2000 Unemployed 13000 Household workers 20000 Students 15000 Retirees 19000 Disabled 5000 Labor force 190000 Civilian population 16 and over 249000()
A. 5.3%.
B. 6.0%.
C. 6.8%.
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[单项选择]According to the quantity theory of money, which one of the following economic variables would change in response to an increase ha the supply of money()
A. Price level.
B. Real income.
C. Velocity.
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[单项选择]Which of the following is included in the M2 measure of the money supply()
A. savings deposits.
B. time deposits.
C. all of the above.
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[单项选择]Which of the following is the most accurate definition of the velocity of money The velocity of money is the:()
A. GDP of a country divided by its price level.
B. money supply of a country divided by its price level.
C. GDP of a country divided by its money supply.
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[单项选择]If the economy is just coming out of a recession, which one of the following would represent a typical sequence of phases in the business cycle()
A. Expansion, business peak, contraction, recession.
B. Expansion, business peak, recession, contraction.
C. Depression, expansion, business peak, contraction.
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[单项选择]Supply-side economics focuses on the impact of:()
A. government borrowing on interest rates and private consumption and investment.
B. higher government spending and lower taxes on aggregate demand.
C. axes on the incentive to engage in productive activities.
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[单项选择]According to the supply-side view of fiscal policy, if the impact of tax revenues is the same, does it make any difference whether the government cuts taxes by either reducing marginal tax rates or increasing the personal exemption allowance()
A. No, both of the methods of cutting taxes will exert the same impact on aggregate supply.
B. No, people in both cases will increase their savings expecting higher future taxes and thereby offset the stimulus effect of lower current taxes.
C. Yes, the lower tax rates alone will increase the incentive to earn marginal income and thereby stimulate aggregate supply.
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[单项选择]Are the following two statements about fiscal policy correct Statement 1: The crowding out effect reduces the multiplier effect of expansionary fiscal policy but does not affect economic growth. Statement 2: A generational imbalance exists if the present value of government benefits to the current generation is not fully paid for by taxes on the current generation. Statement 1 Statement 2()①A. Correct Correct ②B. Correct Incorrect ③C. Incorrect Correct
A. ①
B. ②
C. ③
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[单项选择]Which of the following statements best describes automatic stabilizers Although no legislative action has been taken, automatic stabilizers are programs that apply:()
A. restraint during a recession and stimulus during an economic boom.
B. restraint during a recession but do not apply stimulus during an economic boom.
C. stimulus during a recession and restraint during an economic boom.
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[单项选择]The corporate income tax is an automatic stabilizer because:()
A. corporate profits are strongly counter-cyclical.
B. corporate profits are strongly pro-cyclical.
C. the corporate profits tax increases tax collections during recessions.
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[单项选择]Which of the following is least likely to appear as an asset on the U. S. Federal Reserve's (Fed's) balance sheet()
A. Gold.
B. U.S. currency in circulation.
C. U.S. Treasury bills.
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[单项选择]New classical economists believe expansionary fiscal policy has no affect on aggregate demand because:()
A. fiscal policy does not influence monetary policy.
B. fiscal policy substitutes government demand for private sector demand.
C. consumers will decrease spending and increase savings in anticipation of higher taxes to repay government borrowing.
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[单项选择]If the U.S. Federal Reserve (the Fed) sells government securities, what will most likely be the impact on the real interest rate, inflation rate, employment rate, and real GDP in the short run Inflation Rate Real Interest Rate Real GDP Employment Rate ()①A. Decrease Increase Decrease Decrease ②B. Decrease Decrease Decrease Increase ③C. Increase Decrease Increase Increase
A. ①
B. ②
C. ③
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[单项选择]Assume an economy is operating at full employment and that the central bank announces a decrease in the growth rate of the money supply to reduce inflation, which market participants do not believe is credible. In the short run, are the directions of the impacts on employment and inflation the same or different, and in the long run, are the directions of the impacts on employment and inflation the same or different Short run: Long run: Employment and inflation effects Employment and inflation effects()①A. Same Same ②B. Same Different ③C. Different Same
A. ①
B. ②
C. ③
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[单项选择]Excess reserves of banks are equal to:()
A. required reserves plus demand deposits.
B. required reserves minus actual reserves.
C. actual reserves minus required reserves.
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[单项选择]Joe DeRita is giving an economic briefing before the Senate Banking Committee. During his testimony, Senator Morris Howard states, "Based on the Phillips curve relationship, if we increase the inflation rate from 3% to 5% , we can achieve a reduction in the rate of unemployment in both the short run and the long run. " Senator Lawrence Fine adds, "Furthermore, if the central bank is able to credibly announce that they will maintain the money supply growth rate, so that the increased inflation rate is well anticipated, borrowers, lenders, workers, and employers will incorporate the new higher rate of inflation into long-term contracts, so there will be no adverse impact on the economy. " Should DeRita agree or disagree with the two Senators M. Howard L. Fine()①A. Agree Agree ②B. Agree Disagree ③C. Disagree Disagree
A. ①
B. ②
C. ③
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[单项选择]Meg Joyner has been given an assignment by her economics professor to write a paper discussing the usefulness of the quantity theory of money. Which statement in her paper is least accurate()
A. Monetarists believe that the growth rate of real output should only be increased at the rate of the money supply.
B. Velocity as used in the equation of exchange is the average number of times per year each dollar is used to buy goods and services.
C. An increase in the money supply will lead to an increase in product prices.
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[单项选择]Technically, an individual is unemployed when he or she is actively seeking employment or is:()
A. a retiree.
B. not working at all.
C. waiting to return to a job from which he or she was just laid off.
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[单项选择]If D represents checkable deposits, R represents reserves and r represents the required reserve ratio, the equation that expresses the relationships among the variables is:()
A. D=R/r.
B. R=D/r.
C. r=D/R.
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[单项选择]Total investment is one of the components of a country's GDP. Which of the following is least likely to be considered a source of funds for investment()
A. National savings.
B. Foreign borrowing.
C. Household expenditures.
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[单项选择]Which of the following statements best explains how anticipating the effects of expansionary monetary policy influences its effectiveness When the effects from a change to a more expansionary monetary policy are fully anticipated, we can expect that:()
A. the inflation rate will decrease and increase the policy’s effectiveness.
B. interest rates will decrease in the short run and reduce the policy’s effectiveness.
C. contracts will reflect expected higher prices and reduce the policy’s effectiveness.
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[单项选择]Which of the following statements about the relationship between interest rates and the demand for and supply of money is most accurate Interest rates affect:()
A. the supply of money only.
B. both the demand for and supply of money.
C. the demand for money only.
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[单项选择]In a full employment economy the quantity theory of money states that any increase in the supply of money in excess of the rate of growth of real GDP will lead to:()
A. increased prices.
B. increased velocity.
C. increased production.
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[单项选择]In a recent economic forum meeting, Jason Federmeyer of the Bank of Detroit, and Lawrence Lobovsky of the Bank of Tulsa, were discussing the demand for money and how it has changed over the years. Federmeyer made the following two statements to Lobovsky: Statement 1: Financial innovation has significantly affected the demand for money. The increased use of credit cards and debit cards, interest-bearing checking accounts, internet banking and even the large number of ATMs around the world have all helped to increase the demand for money above what it would have been if only the increase in real GDP were at work. Statement 2: Although the quantity of money demanded is largely determined by interest rates, the supply of money is determined by the central bank and is independent of interest rates. Are Statement 1 and Statement 2 as made by Federmeyer correct Statement 1 Statement 2()①A. Incorrect Incorrect ②B. Correct Incorrect ③C. Incorrect Corre
A. ①
B. ②
C. ③
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[单项选择]The crowding-out model suggests that persistent, large government budget deficits are most likely to be associated with a(n):()
A. increase in net exports.
B. decrease in private spending.
C. decrease in the real rate of interest.
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[单项选择]The supply of money is primarily determined by:()
A. inflation.
B. the monetary authorities.
C. interest rates.
-
[单项选择]A central bank can control the money of stock by: Ⅰ. establishing reserve requirements for depository institutions Ⅱ. buying and selling government securities in the open market Ⅲ. setting the interest rate at which it will loan funds to commercial banks and other depository institutions Which of the following is FALSE()
A. Ⅰ only.
B. Ⅱ only.
C. none.
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[单项选择]A shift in the long-run Phillips curve represents a change in the:()
A. actual inflation rate.
B. expected inflation rate.
C. natural rate of unemployment.
-
[单项选择]The potential deposit expansion multiplier equals: ()
A. the required reserve ratio.
B. the inverse of the required reserve ratio.
C. the required reserve ratio multiplied by the quantity of reserves.
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[单项选择]Initially, the nominal interest rate is 8 percent and the expected rate of inflation is 6 percent. One year later, the nominal interest rate rises to 12 percent and inflation rate to 10 percent. Based on this information the interest rate:()
A. has risen.
B. has fallen.
C. has remained the same.
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[单项选择]The demand for money is inversely related to the real interest rate because:()
A. the cost of holding money falls as the real interest rate goes down.
B. increasing wealth makes cash balances unnecessary.
C. taxes make productive uses of funds less profitable.
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[单项选择]Two economists, Pearl Millidge and Byron Forrest, are discussing theories that explain why increased inflation causes nominal interest rates to rise. They offer the following explanations: Millidge: Because businesses expect higher prices for their output in the future, they will expect a greater return on their investments and will increase their demand for financial capital, which will drive interest rates higher. Forrest: Savers expect to pay higher prices for goods and services in the future, so they will be less willing to trade current consumption for future consumption and will therefore supply less financial capital, so interest rates increase. Are these explanations correct Millidge Forrest()①A. Correct Correct ②B. Correct Incorrect ③C. Incorrect Correct
A. ①
B. ②
C. ③
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[单项选择]Unemployment compensation is an example of:()
A. a discretionary fiscal policy stabilizer.
B. an automatic fiscal policy stabilizer.
C. an automatic monetary policy stabilizer.
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[单项选择]An analyst gathers the following information about Monument State Bank: Demand deposits $ 400 million. Loans and securities $ 260 million. Reserve requirement 10%. The bank has a total of $ 50 million in cash and deposits with the Federal Reserve. Monument Stare Bank is in a position to make additional loans of:()
A. $ 5 million.
B. $10 million.
C. $ 26 million.
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[单项选择]During the seminar, "Inflation - Friend or Foe" Joe Lebow, an analyst with Greenwald & Associates, was discussing the difference between inflation and price level. He made the following two statements: Statement 1: To measure the inflation rate of a currency, one should calculate the annual percentage change in the price level. The calculation of this change shows the connection between the inflation rate and the price level. Statement 2: The higher the price level in the current year compared to the price level in the previous year, the higher is the inflation rate of a country. Any increase in the price level is evidence of (positive) inflation. Are the statements as made by Lebow regarding inflation and price levels correct Statement 1 Statement 2()①A. Incorrect Incorrect ②B. Correct Correct ③C. Correct Incorrect
A. ①
B. ②
C. ③
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[单项选择]The combination of currency in circulation, banks' reserve deposits at the central bank, and coins issued by the Treasury is referred to as the:()
A. M1 money supply.
B. liquid money supply.
C. monetary base.
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[单项选择]A period when an economy is experiencing substantial inflation and either a declining or slow rate of growth in output is called:()
A. deflation.
B. stagflation.
C. depression.
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[单项选择]Assume the reserve requirement is 10 percent. First National Bank has cash (and deposits with the Federal Reserve) of $25 million, loans and securities of $175 million, and demand deposits of $ 200 million. First National is in a position to make additional loans of:()
A. $ 5.0 million.
B. $17.5 million.
C. $ 20.0 million.
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[单项选择]Assume that nominal gross domestic product (GDP) is $10 trillion and the money supply is $ 5 trillion. What is the velocity of money()
A. 5x.
B. 50x.
C. 2x.
-
[单项选择]Which of the following is an effect of expansionary monetary policy()
A. lower prices.
B. lower real output.
C. higher employment.
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[单项选择]If an increase in aggregate demand is greater than expected, actual inflation is:()
A. greater than expected inflation and unemployment increases.
B. less than expected inflation and unemployment decreases.
C. greater than expected inflation and unemployment decreases.
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[单项选择]A recession is defined as a period during which real gross domestic product (GDP) declines for:()
A. one or more successive quarters.
B. two or more successive quarters.
C. three or more successive quarters.
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[单项选择]Most research indicates that there is, at best, only a weak relationship between budget deficits and interest rates; higher deficits may simply be matched by high savings. This statement most closely reflects which one of the following views of fiscal policy()
A. Keynesian theory.
B. Crowding-out theory.
C. New classical theory.
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[单项选择]Analysis using the AS-AD model suggests that if expected inflation equals actual inflation:()
A. unemployment will rise.
B. unemployment will fall.
C. the economy will remain at full-employment GDP.
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[单项选择]Geno Potosi is delivering a lecture on the Phillips curve model, during which he makes the following two statements: Statement 1: If expected inflation is less than actual inflation, the short-run Phillips curve shows that the unemployment rate will increase. Statement 2: The negative relationship between the inflation rate and unemployment rate does not hold in the long run because the expected inflation rate adjusts to the actual performance of inflation. Are Potosi’s two statements correct Statement 1 Statement 2()①A. Correct Correct ②B. Incorrect Correct ③C. Correct Incorrect
A. ①
B. ②
C. ③
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[单项选择]An expansionary fiscal policy is most likely to include a(n):()
A. Increase in government expenditures and a decrease n tax rates.
B. decrease in both government expenditures and tax rates.
C. increase in both government expenditures and tax rates.
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[单项选择]A business peak is present when:()
A. most businesses are operating at below level and real GDP is decreasing rapidly.
B. most businesses are operating at capacity level and real GDP is decreasing rapidly.
C. most businesses are operating at capacity level and real GDP is growing rapidly.
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[单项选择]Robert Necco and Nelson Packard are economists at Economic Research Associates. ERA asks Necco and Packard for their opinions about the effects of fiscal policy on real GDP for an economy currently experiencing a recession. Necco states that real GDP is likely to increase if both government spending and taxes are increased by the same amount. Packard states that if both government spending and taxes are increased by the same amount, there is no expected net effect on real GDP. Regarding the statements made by Necco and Packard: Necco Packard()①A. Correct Correct ②B. Correct Incorrect ③C. Incorrect Incorrect
A. ①
B. ②
C. ③
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[单项选择]You are expecting an additional payment of 52000 of income this year. You intend to save 5 500 of the 5 2000. According to the multiplier effect, total spending will increase by a total amount of:()
A. 51500.
B. 54000.
C. 56000.
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[单项选择]With respect to discretionary changes in both monetary and fiscal policy, the time period necessary to gather and tabulate reliable information about an economy's performance is best described as the:()
A. impact lag.
B. recognition lag.
C. administrative lag
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[单项选择]Edward Murray and Kelvin Rippen, economists at M-R Associates, are asked for their opinions on the effects of higher-than- expected inflation. Murray states that higher-than-expected inflation hurts lenders and helps borrowers. Rippen contends that higher-than-expected inflation causes the real interest rate to be lower than expected. Regarding the statements made by Murray and Rippen: Murray Rippen ()①A. Correct Incorrect ②B. Incorrect Correct ③C. Correct Correct
A. ①
B. ②
C. ③
-
[单项选择]According to the Phillips curve approach, when inflation is less than expected, the most likely initial effect is that:()
A. real wage rates will fall.
B. real interest rates will fall.
C. unemployment will rise above its natural rate.
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[单项选择]The federal government seeks ways to increase the total investment component of GDP. In response to the government’s objective, economist Scan Zadora recommends that the federal government lower taxes on interest earned on savings accounts. Zadora’s colleague, Timothy Smythe, recommends that the federal government reduce its budget deficit. Regarding the statements made by Zadora and Smythe: Zadora Smythe()①A. Correct Incorrect ②B. Correct Correct ③C. Incorrect Ineorrect
A. ①
B. ②
C. ③
-
[单项选择]Which of these factors is least likely to change the natural rate of unemployment()
A. An unexpected tightening of the money supply reduces aggregate demand.
B. Long-term demographic shifts result in fewer young adults in the labor force.
C. Labor market deregulation makes it easier for workers to change jobs.
-
[单项选择]Which of the following does the U.S. central bank most often use to change the money supply()
A. The discount rate.
B. The deposit expansion multiplier.
C. Open market operations.
-
[单项选择]Under the classification system used by the U.S. Bureau of Labor Statistics, which of the following people would NOT be considered unemployed Someone who:()
A. was terminated from his last job.
B. quit and is looking for new work.
C. is disabled and unable to return to work.
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[单项选择]The Laffer curve indicates that:()
A. an increase in income tax rates will increase tax revenue.
B. a decrease in sales tax rates could increase tax revenue.
C. an increase in income tax rates may not increase tax revenue.
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[单项选择]Which of the following statements is least accurate According to the quantity theory of money:()
A. velocity is determined by institutional factors.
B. inflation is a function of increases in the money supply.
C. the price level is equal to the quantity of output divided by the money supply.
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[单项选择]According to the crowding-out effect, which of the following statements is FALSE The sale of government bonds used to finance excess government spending will:()
A. raise the real interest rate.
B. raise the nominal interest rate.
C. increase the profitability of corporate investment projects.
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[单项选择]In a full employment economy, the quantity theory of money states that any increase in the sup ply of money will lead to:()
A. increased prices.
B. increased velocity.
C. increased production.
-
[单项选择]If the money interest rate is measured on the y-axis and the quantity of money is measured on the x-axis, the money supply curve is:()
A. horizontal.
B. upward sloping to the upper right.
C. vertical.
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[单项选择]At a recent staff meeting of Economic Advisers Inc. , a think-tank located in Washington, DC, Mitchell Jung made the following statements regarding the main economic functions of depository institutions. Statement 1: One of the main economic functions of depository institutions is to act as financial intermediaries. By doing so, they lower the borrowers’ cost of funds from what it would otherwise be if borrowers had to seek out individuals willing to lend. Statement 2: Depository institutions create liquidity by using loans they take in to have funds available to pay interest on short-term deposits. Are Statement 1 and Statement 2 as made by Jung correct Statement 1 Statement 2()①A. Incorrect Incorrect ②B. Correct Incorrect ③C. Incorrect Correct
A. ①
B. ②
C. ③
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[单项选择]Which of the following statements regarding inflation is most accurate()
A. The purchasing power of money increases as a result of inflation.
B. Inflation has no effect on the real economic output.
C. Inflation is a persistent increase in the general price level of goods and services.
-
[单项选择]If people correctly anticipate the effects of expansionary monetary policy before it occurs, then implementing the policy will:()
A. decrease real output.
B. leave the price level unchanged.
C. increase real output.
-
[单项选择]When real interest rates fall as a result of an unexpected expansionary monetary policy of government:()
A. aggregate demand decreases leading to both an increase in current output and higher prices in the short run.
B. aggregate demand increases leading to both an increase in current output and higher prices in the short run.
C. aggregate demand increases leading to both a decrease in current output and higher prices in the short run.
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[单项选择]Automatic stabilizers are government programs that tend to: ()
A. automatically increase tax collections during a recession.
B. reduce interest rates, thus stimulating aggregate demand.
C. change government deficits in a manner counter-cyclical to economic growth without legislative action.
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[单项选择]In the Phillips curve model of the relationship between inflation and the unemployment rate, a shift to a new short-run Phillips curve represents a change in the:()
A. expected inflation rate.
B. actual inflation rate.
C. unemployment rate.
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[单项选择]Which of the following would be counted as frictional unemployment()
A. Due to the negative growth of GDP, Smith was laid off.
B. Johnson was fired from his job after he got into an argument with his foreman.
C. Although there were jobs available, Jones was unable to find an employer with an opening.
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[单项选择]A. central bank bases its long-run strategy for achieving price stability on targeting the growth rate of the money supply to equal the difference between the 10-year average growth rate of real GDP and the 4-yearaverage growth rate in the velocity of money. The bank also attempts to reduce the magnitude of business cycles. When the bank’s governing board perceives a significant difference between actual real GDP and full-employment real GDP, they adjust the money supply in the countercyclical direction: Which type of monetary policy is the Central bank following()
A. Fixed-rule.
B. Discretionary.
C. New Keynesian feedback rule.
-
[单项选择]Which of the following is most likely to be an effect of budget deficits()
A. an increase in exports.
B. a balance of trade surplus.
C. foreign goods become relatively less expensive for U.S. buyers.
-
[单项选择]The Laffer curve begins at:()
A. zero tax revenues and ends at zero tax revenues.
B. zero tax revenues and ends at maximum theoretical tax revenues.
C. minimum tax revenues and ends at maximum theoretical tax revenues.
-
[单项选择]When the economy is operating at potential GDP, an unannounced decrease in the rate of growth of the money supply intended to reduce inflation will most likely lead to. lower inflation and:()
A. a decrease in output in both the short run and the long run.
B. no change in output in both the short run and the long run.
C. a decrease in output in the short run, and lower inflation but no change in output in the long run.
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[单项选择]Which of the following statements about phases of the business cycle is most accurate()
A. During an expansion, real output grows and unemployment increases.
B. During contraction, real output declines and unemployment decreases.
C. The business peak is the highest output (measured in GDP) of an expansion.
-
[单项选择]Which of the following will not cause a change in the demand for money()
A. an increase in the nominal value of transactions.
B. inflation.
C. a change in the real interest rate.
-
[单项选择]Which of the following is not an effect of restrictive monetary policy()
A. higher real interest rates.
B. lower real output.
C. higher employment.
-
[单项选择]The term crowding out implies that:()
A. the Fed purchasing securities causes inflation in the long run.
B. a budget surplus will be a highly effective weapon against inflation.
C. budget deficits will increase real interest rates and thereby retard private spending.
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[单项选择]Discretionary fiscal policy can be defined as:()
A. a situation in which total government spending exceeds total government revenue during a specific time period, usually one year.
B. a change in laws or appropriation levels that alters government revenues and/or expenditures.
C. a situation in which total government spending is less than total government revenue during a time period, usually one year.
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[单项选择]An asset that will allow people to transfer purchasing power from one period to the next is known as a:()
A. liquid asset.
B. unit of account.
C. store of value.
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[单项选择]Silvano Jimenez, an analyst at Banco del Rey, is reviewing recent actions taken by the U. S. Federal Reserve (the Fed) in setting monetary policy. Recently, the Fed decided to increase the money supply, which has resulted in a decrease in real interest rates. At a staff meeting, Jimenez brings this matter to the attention of his colleagues and makes the following statements: Statement 1: Although the money supply increase has led to a decrease in real interest rates, we should begin to see U.S. investors decrease their investments abroad and the U.S. dollar will appreciate in the foreign exchange market. Statement 2: The Fed’s increase in the money supply will increase the amount of imports into the U. S. Are Statement 1 and Statement 2 as made by Jimenez correct Statement 1 Statement 2()①A. Incorrect Correct ②B. Correct Incorrect ③C. Incorrect Incorrect
A. ①
B. ②
C. ③
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[单项选择]Which one of the following propositions would a strong proponent of supply-side economics be most likely to stress()
A. Higher marginal tax rates will lead to a reduction in the size of the budget deficit and lower interest rates, since they expand government revenues.
B. Higher marginal tax rates promote economic inefficiency and thereby retard aggregate output, since they encourage investors to undertake low productivity projects with substantial tax-shelter benefits.
C. Income redistribution payments will exert little impact on real aggregate supply, since they do not consume resources directly.
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[单项选择]At a recent conference, Joe DiSanto and Michael Depasquale were discussing a recent Federal Reserve policy shift that led to an increase in banks’ excess reserves. They each offered an explanation as to why this would cause an increase in bank loans and investments: DiSanto: "Banks are required by law to expand the number of loans they originate when the Fed creates excess reserves. " Depasquale: "It is risky to hold excess reserves, whereas loans and investments are less risky. " Are DiSanto and Depasquale’s statements correct DiSanto Depasquale()①A. Incorrect Incorrect ②B. Correct Incorrect ③C. Incorrect Correct
A. ①
B. ②
C. ③
-
[单项选择]The idea behind the Laffer curve is that increases in tax rates do not increase tax revenues proportionately because they decrease the:()
A. demand for labor.
B. supply of labor.
C. productivity of labor.
-
[单项选择]Anticipating the effects of monetary policy:()
A. makes monetary policy more effective as an instrument of stabilization policy.
B. increases the resulting change in real output and employment.
C. can result in real and nominal interest rates moving in opposite directions.
-
[单项选择]Proper timing of fiscal policy is important if the government is to:()
A. generating revenues from taxes and sales equal to its expenditures.
B. stimulate economic activity during a recession and restrain the economy during an inflationary boom.
C. increasing the supply of loanable funds needed to place downward pressure on the real rate of interest.
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[单项选择]Which of the following statements is most accurate with respect to the measures of the money supply()
A. When a firm writes a check to an individual, the M1 measure is increased.
B. When an individual pays for a transaction at a business with a credit card, the M2 measure is increased.
C. M2 includes M1 plus time deposits, savings deposits, and money market mutual fund balances.
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[单项选择]Assuming the economy currently is experiencing high inflation, an example of appropriate discretionary fiscal policy is:()
A. increase the federal funds target rate.
B. reduce government expenditures on major government construction projects.
C. reduce the money supply.
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[单项选择]According to the quantity theory of money, if the gross domestic product is $6 trillion and M1 money supply is $ 800 billion, the velocity of the M1 money supply is:()
A. 0.133.
B. 1.153.
C. 7.500.
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[单项选择]If households are holding larger real money balances than they desire, which of the following is least likely()
A. The opportunity cost of holding money balances will decrease.
B. Households will bid up securities prices.
C. The central bank must sell securities to absorb the excess money supply and establish equilibrium.