Question;(TCO 5) An increase in expected;future income will (Points: 4);increase aggregate demand and aggregate supply.;decrease aggregate demand and aggregate supply.;increase aggregate supply.;increase aggregate demand.;Question 2.2. (TCO 5) The upward slope of the short-run aggregate supply curve;is based on the assumption that (Points: 4);wages and other resource prices do not respond to price level changes.;wages and other resource prices do respond to price level changes.;prices of output do not respond to price level changes.;prices of inputs are flexible while prices of outputs are fixed.;Question 3.3. (TCO 5) If the price of crude oil decreases, then this event;would most likely (Points: 4);decrease aggregate supply in the U.S.;increase aggregate supply in the U.S.;increase aggregate demand in the U.S.;decrease aggregate demand in the U.S.;Question 4.4. (TCO 5) Deflation refers to a situation where (Points: 4);price level falls.;price level rises.;the rate of inflation falls.;the rate of inflation rises.;Question 5.5. (TCO 6) Dissaving occurs when (Points: 4);income is greater than saving.;income is less than consumption.;saving is greater than consumption.;saving is greater than the interest rate.;Question 6.6. (TCO 7) The M1 money supply is composed of (Points: 4);all coins and paper money held by the general public and the banks.;bank deposits of households and business firms.;bank deposits and mutual funds.;checkable deposits and currency in circulation.;Question 7.7. (TCO 7) The basic requirement of money is that it be (Points: 4);backed by precious metals--gold or silver.;authorized as legal tender by the central government.;generally accepted as a medium of exchange.;some form of debt or credit.;Question 8.8. (TCO 7) The Federal Reserve System consists of which of the;following? (Points: 4);Federal Open Market Committee and Office of Thrift Supervision;Federal Deposit Insurance Corporation and Controller of the Currency;U.S. Treasury Department and Bureau of Engraving and Printing;Board of Governors and the 12 Federal Reserve Banks;Question 9.9. (TCO 7) Which group is responsible for the policy of changing the;money supply? (Points: 4);Federal Open Market Committee;Office of Management and Budget;Thrift Advisory Council;Federal Advisory Council;Question 10.10. (TCO 7) The Federal funds rate is the rate that banks pay for;loans from (Points: 4);the Fed.;the U.S. Treasury.;other banks.;large corporations.;Question 11.11. (TCO 7) The difference between Fed behavior during the Bank;Panics of 1930-1933 and the Financial Crisis of 2007-2008 is that the Fed;(Points: 4);was very active during the former crisis, while it was basically passive during;the latter crisis.;stood idly by during the former crisis, but took dramatic actions during;the latter crisis.;was not yet in existence during the 1930s.;was a much bigger institution in the 1930s than it is today.;Question 12.12. (TCO 7) Which one of the following is a tool of monetary policy;for altering the reserves of commercial banks? (Points: 4);Issuing currency;Check collection;Open-market operations;Acting as the fiscal agent for the federal government;Question 13.13. (TCO 7) The Federal Reserve could reduce the money supply by;(Points: 4);selling government bonds in the open market.;buying government bonds in the open market.;operating the term auction facility.;reducing the discount rate.;Question 14.14. (TCO 8) Which nation has greatly increased its role in;international trade in recent years? (Points: 4);Japan;Iran;Peru;China;Question 15.15. (TCO 8) In a two-nation world, comparative advantage means that;one nation can produce (Points: 4);a product with fewer inputs than the other nation.;a product at lower average cost than the other nation.;a product at a lower domestic opportunity cost than the other nation.;more of a product than the other nation.;Question 16.16. (TCO 8) If a nation imposes a tariff on an imported product;then the nation will experience a(n) (Points: 4);decrease in total supply and an increase in the price of the product.;decrease in demand and a decrease in the price of the product.;decrease in supply of, and an increase in demand for, the product.;increase in supply of, and a decrease in demand for, the product.;Question 17.17. (TCO 8) Tariffs and quotas are costly to consumers because;(Points: 4);the price of the imported good falls.;the supply of the imported good increases.;import competition increases for domestic go;consumers shift purchases to domestically-produced goods.
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