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Post Eco201 final exam

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Question;Post Eco201 final examPost Eco201 final exam? Question;1;2 out of 2 points;Other things the same, an;increase in the money supply cause the interest rate to rise to balance money;supply and money demand.;Answers: True;False;? Question;2;2 out of 2 points;According to Friedman and Phelps;it is appropriate to view the Phillips curve as a menu of options available to;policymakers.;Answers: True;False;? Question;3;0 out of 2 points;Purchasing-power parity means;that the prices of goods in terms of local currencies must be the same across;countries.;Answers: True;False;? Question;4;2 out of 2 points;During recessions;Answers: unemployment;falls and a decline in consumption accounts for the majority of the decline in;output.;unemployment;rises and a decline in consumption accounts for the majority of the decline in;output.;unemployment rises and a decline in investment accounts for;the majority of the decline in output.;unemployment;falls and a decline in investment accounts for the majority of the decline in;output.;? Question;5;0 out of 2 points;Which of the following decreases;the natural rate of unemployment?;Answers;a decrease in the minimum wage but not an increase in the;money supply growth rate;neither;an increase in the money supply growth rate nor a decrease in the minimum;wage;a;decrease in the minimum wage and an increase in the money supply growth;rate;an;increase in the money supply growth rate but not a decrease in the minimum;wage;? Question;6;2 out of 2 points;As the price level rises, the;value of money rises.;Answers: True;False;? Question;7;2 out of 2 points;If the U.S. inflation rate is;positive and higher than the inflation rate in Australia over the next few;years then;Answers;the U.S. dollar will buy fewer goods in the U.S. and buy;fewer Australian dollars in the market for foreign currency exchange.;the;U.S. dollar will buy fewer goods in the U.S. but buy more Australian dollars in;the market for foreign currency exchange.;the;U.S. dollar will buy more goods in the U.S. and buy more Australian dollars in;the market for foreign currency exchange.;the;U.S. dollar will buy more goods in the U.S. but buy fewer Australian dollars in;the market for foreign currency exchange.;? Question;8;2 out of 2 points;If Americans decided to save a;larger fraction of their income, the interest rate would fall and the dollar;would depreciate.;Answers: True;False;? Question;9;2 out of 2 points;As inflation rises, people choose;to hold less money. The resources used to reduce money holdings are called shoe;leather costs.;Answers: True;False;? Question;10;2 out of 2 points;If firms and businesses became;more optimistic about the future, what would happen to prices and output in the;short run?;Answers: prices;would fall and output would rise;prices and output would rise;prices;would rise and output would fall;prices;and output would fall;? Question;11;2 out of 2 points;The demand curve for dollars in;the market for foreign-currency exchange is based on the logic that a decrease;in the exchange rate makes;Answers: domestic;goods more expensive relative to foreign goods so net exports rise.;purchasing;assets from abroad less attractive so net capital outflow rises.;purchasing;assets from abroad more attractive so net capital outflow rises.;domestic goods less expensive relative to foreign goods so;net exports rise.;? Question;12;0 out of 2 points;Under the assumptions of quantity;theory, if the money supply increases by 3 percentage points which of the;following increases by 3 percentage points?;Answers;the price level but not real GDP;neither;real GDP nor the price level;real;GDP but not the price level;real;GDP and the price level;? Question;13;0 out of 2 points;Suppose the price of the product;you sell stays the same, but the prices of other goods and services rise, this;means that the;Answers: nominal;value of your product rose.;nominal;value of your product fell.;real value of your product fell.;real;value of your product rose.;? Question;14;0 out of 2 points;In the United States during the;1970's, expected inflation rose substantially. This rise was due entirely to a;supply shock not to higher money supply growth.;Answers: True;False;? Question;15;0 out of 2 points;Other things the same, if the;U.S. dollar appreciates, then U.S. goods become;Answers: cheaper;relative to foreign goods, so U.S. net exports decrease.;more;expensive relative to foreign goods, so U.S. net exports increase.;more expensive relative to foreign goods, so U.S. net;exports decrease.;cheaper;relative to foreign goods, so U.S. net exports increase.;? Question;16;0 out of 2 points;The long-run Phillips curve implies;that monetary policy influences nominal but not real variables.;Answers: True;False;? Question;17;2 out of 2 points;According to the economist's;definition, money includes only the few types of wealth that are regularly;accepted by sellers in exchange for goods and services.;Answers: True;False;? Question;18;0 out of 2 points;According to the long-run;Phillips curve what are the long-run effects of an increase in the money supply;growth rate?;Answers: higher;inflation and higher unemployment.;no;change in inflation or unemployment.;higher inflation and no change in unemployment.;higher;inflation and lower unemployment;? Question;19;0 out of 2 points;If the U.S. were to impose an;import quota on CD players;Answers: net;exports and the exchange rate would rise.;net;exports and the exchange rate would be unchanged.;net exports would be unchanged and the exchange rate would;rise.;net;exports would rise and the exchange rate would be unchanged.;? Question;20;2 out of 2 points;When the Fed announces a target;for the federal funds rate it essentially accommodates the day-to-day shifts in;money demand by adjusting the money supply accordingly.;Answers: True;False;? Question;21;0 out of 2 points;The recession of 2008-2009 was;associated with a decrease in aggregate demand.;Answers: True;False;? Question;22;2 out of 2 points;National saving is the source of;the supply of loanable funds in the open-economy macroeconomic model.;Answers: True;False;? Question;23;2 out of 2 points;The Fed's primary tool to change;the money supply is open-market operations, the buying and selling of bonds.;Answers: True;False;? Question;24;0 out of 2 points;If some firms have sticky prices;and the price level raises more than had been anticipated, then in the short;run those firms with sticky prices will have;Answers;an increase in customers and so increase production.;a;decrease in customers and so reduce production.;a;decrease in customers but will not change production.;an;increase in customers but will not change production.;? Question;25;0 out of 2 points;Classical theory points to money;supply growth as the primary determinant of;Answers: both;unemployment and inflation.;neither;inflation nor unemployment.;unemployment;but not inflation.;inflation but not unemployment.;? Question;26;0 out of 2 points;Money that has value as a good is;called fiat money.;Answers: True;False;? Question;27;0 out of 2 points;If the U.S. put an import quota;on refrigerators, it would;Answers: raise;U.S. net exports of refrigerators and raise net exports of other U.S.;goods.;lower;U.S. net exports of refrigerators and lower net exports of other U.S.;goods.;lower;U.S. net exports of refrigerators and raise net exports of other U.S.;goods.;raise U.S. net exports of refrigerators and lower net;exports of other U.S. goods.;? Question;28;0 out of 2 points;Which of the following best;illustrates money's use as a unit of account?;Answers: Susan;deposits money in her checking account so she can make purchases in the future.;Loan repayments are given in terms of dollars.;Ann;liquidates stocks.;Robert;uses dollars to buy tickets for a concert.;? Question;29;2 out of 2 points;A mutual fund in China buys;$100,000 of bonds sold by a U.S. corporation. This is an example of;Answers;foreign portfolio investment. By itself it reduces U.S. net;capital outflow.;foreign;direct investment. By itself it raises U.S. net capital outflow.;foreign;portfolio investment. By itself it raises U.S. net capital outflow.;foreign;direct investment. By itself it reduces U.S. net capital outflow.;? Question;30;0 out of 2 points;If aggregate demand shifts right;farther than expected, then;Answers: inflation;is lower than expected and unemployment rises.;inflation is higher than expected and unemployment;falls.;inflation;is lower than expected and unemployment falls.;inflation;is higher than expected and unemployment rises.;? Question;31;0 out of 2 points;Which of the following is;included in M2 but not M1?;Answers: other;checkable deposits;demand;deposits;traveler's;checks;savings deposits;? Question;32;2 out of 2 points;An increase in the interest rate;increases the opportunity cost of holding money, so the quantity of money;demanded falls.;Answers: True;False;? Question;33;0 out of 2 points;Which of the following Fed;actions both increase the money supply?;Answers: increasing;reserve requirements, decreasing the interest rate it pays on reserves;increasing;reserve requirements, increasing the interest rate it pays on reserves;decreasing reserve requirements, decreasing the interest;rate it pays on reserves;decreasing;reserve requirements, increasing the interest rate it pays on reserves;? Question;34;0 out of 2 points;If the government of a foreign;country chooses to purchase large quantities of U.S. assets, which of the;following happens?;Answers: the;U.S. interest rate rises and the dollar appreciates;the;U.S. interest rate falls and the dollar depreciates;the U.S. interest rate falls and the dollar appreciates;the;U.S. interest rate rises and the dollar depreciates;? Question;35;2 out of 2 points;According to rational;expectations if the government made a credible commitment to a policy of low;inflation, people would be rational enough to lower their expectations of;inflation immediately. The short run Phillips curve would shift downward and;the economy would reach low inflation quickly.;Answers: True;False;? Question;36;2 out of 2 points;Net capital outflow equals net;exports.;Answers: True;False;? Question;37;0 out of 2 points;If consumers and businesses;became more pessimistic about the future of the economy, the government could;try to stabilize output by;Answers: decreasing;government expenditures. The primary objection to this is that an increase in;government expenditures has no impact on the economy.;decreasing;government expenditures. The primary objection to this is that there are lags;in implementing fiscal policy.;increasing;government expenditures. The primary objection to this is that an increase in;government expenditures has no impact on the economy.;increasing government expenditures. The primary objection to;this is that there are lags in implementing fiscal policy.;? Question;38;0 out of 2 points;During the financial crisis and recession;of 2008-2009;Answers: unemployment;and inflation were low;unemployment;and inflation were high;unemployment;was low and inflation was high;unemployment was high and inflation was low;? Question;39;0 out of 2 points;Net capital outflow is determined;by;Answers: the;interest rate and the exchange rate. It is the source of the supply of dollars;in the market for foreign-currency exchange.;the;interest rate and the exchange rate. It is the source of the demand for dollars;in the market for foreign-currency exchange.;the interest rate but not the exchange rate. It is the;source of the supply of dollars in the market for foreign-currency;exchange.;the;interest rate but not the exchange rate. It is the source of the demand for;dollars in the market for foreign-currency exchange.;? Question;40;0 out of 2 points;A U.S. retail store uses dollars;to purchase Yuan (Chinese currency) it then uses all of these Yuan to buy toys;from a Chinese firm. Overall these transactions have;Answers: increased;U.S. net exports and decreased U.S. net capital outflow.;decreased;U.S. net exports and increased U.S. net capital outflow.;increased;U.S. net exports and increased U.S. net capital outflow.;decreased U.S. net exports and decreased U.S. net capital;outflow.;? Question;41;2 out of 2 points;An open economy can only finance;its investment purchases with domestic saving.;Answers: True;False;? Question;42;2 out of 2 points;At a price level below;equilibrium people want to hold;Answers;less money than the Fed has created, so spending would;rise.;less;money than the Fed has created, so spending would fall.;more;money than the Fed has created, so spending would fall.;more;money than the Fed has created, so spending would rise.;? Question;43;2 out of 2 points;Which of the following both;decrease the money supply?;Answers;banks want to hold a larger share of deposits as excess reserves;households want to hold more currency relative to deposits;banks;want to hold a smaller share of deposits as excess reserves, households want to;hold less currency relative to deposits;banks;want to hold a smaller share of deposits as excess reserves, households want to;hold more currency relative to deposits;banks;want to hold a larger share of deposits as excess reserves, households want to;hold less currency relative to deposits;? Question;44;0 out of 2 points;Other things the same, an;increase in the price level shifts money demand;Answers: left;which raises the interest rate.;left;which lowers the interest rate.;right which raises the interest rate.;right;which lowers the interest rate.;? Question;45;2 out of 2 points;If the short-run aggregate supply;curve were to shift left, prices and output would fall.;Answers: True;False;? Question;46;2 out of 2 points;Short-run fluctuations in output;and the price level should be viewed as deviations from the continuing long-run;trends of output growth and inflation.;Answers: True;False;? Question;47;0 out of 2 points;In the market for foreign;currency-exchange an increase in the demand for dollars would cause the real;exchange rate to fall.;Answers: True;False;? Question;48;2 out of 2 points;Nearly all hyperinflations follow;the same pattern: high government spending is financed by increases in the;money supply.;Answers: True;False;? Question;49;2 out of 2 points;How many members of the Board of;Governors are voting member of the FOMC?;Answers;seven;twelve;four;five;? Question;50;0 out of 2 points;In 2008 the U.S. budget deficit;increased. According to the open-economy macroeconomic model;Answers;the interest rate and the real exchange rate should have;risen.;the;interest rate and the real exchange rate should have fallen.;the;interest rate should have fallen and the real exchange rate should have;risen.;the interest;rate should have risen and the real exchange rate should have fallen.

 

Paper#56227 | Written in 18-Jul-2015

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