9. In times of recession, Congress has often acted to extend unemployment benefi
ID: 1127991 • Letter: 9
Question
9. In times of recession, Congress has often acted to extend unemployment benefits beyond the automatic 26 weeks ot benefits because unemployment is still high. This kind of policy is an example of: discretionary fiscal policy ) a tax on unemployment insurance recipients C) an automatic stabilizer D) a strategy to soak the rich 10. In calculating the Consumer Price Index, the 'market basket' is: A) the tangible goods, but not services, the typical consumer purchases during a given period C) the goods that can comfortably fit into a bushel basket D) sum total of all grocery items the typical consumer purchases during a given time period. combination of goods and services that the typical consumer purchases. 11. A barter economy can be characterized as one A) where people negotiate directly over the monetary price of the items exchanged B) where goods and services are exchanged after a monetary price is determined C) where the government's role in the economy is nonexisient D) where goods and services are directly exchanged without the use of a specific money asset. 12. The three main functions of money are A) a medium of exchange, means of credit, valuing transaction costs. B) a medium of exchange, unit of account, store of goods C) a unit of account, medium of exchange, a store of value. D) a unit of account, medium of communication, medium of exchange 13. Liquidity refers to: A) the case of transporting money assets B) the ease of converting any given asset into a medium of exchange. C) the ability of a money asset to retain its value. D) the ability to hide a moncy asset 14. The "money supply" refers to: A) how much money banks have in their vaults. B) how much money households have to spend. C) the amount of moncy assets circulating throughout the economy D) the number of bills being printed by the Bureau of Printing and Engraving 15. Money supply as measured by M2 includes: A) saving accounts, small time deposits, and money market mutual funds B) MI plus saving accounts, small time deposits (CDs), and moncy market mutual funds. C) MI plus checkable deposits, currency, and traveler's checks. D) savings accounts, bonds, and stocks 16. Monetary policy refers to: A) actions taken by the Federal Reserve to change the unemployment rate through government spending and taxes B) actions of financial intermediaries to change the money supply in order to maximize profits C) actions of the President to change the money supply to achieve the economy's macroeconomic goals D) actions by the Fed. Res to change the money supply primarily to achieve a balance in the intermational markets. E) actions by the Fed. Res. to change the money supply to achieve the economy's macroeconomic goals 17. If the price of the US dollar rises in the foreign exchange market (such as against the Euro, Yen, Pound, etc.), the practical effect is: A) US goods, but not services, become more expensiven theworld market B) Americans pay more for the currency needed to purchase foreign goods and services. C) foreign countries complain more loudly about the negative impact on their exports to the US.Explanation / Answer
11.
A barter economy can be characterized as one:
D) where goods and services are directly exchanged without the use of a specific money asset.
This is becuase in case of barter economy people will go to market and exchange there goods.
12.
The main three functions of money are:
C) a unit of account, medium of exchange, a store of value.
13.
Liquidity refers to:
B) the ease of converting any given asset into a medium of exchange.
This is becuase liquidity means how easily an asset can be converted into cash.
14.
The "money supply" refers to:
C) the amount of money assets circulating throughout the economy.
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