Quiz on Chapters 16 and 17 (Everything Economics) Multiple Choice (Please answer
ID: 1185245 • Letter: Q
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Quiz on Chapters 16 and 17 (Everything Economics) Multiple Choice (Please answer 20 out of the following) 20 points-1 point each 1- In the short run, an expansionary monetary policy by the Fed would: a. reduce unemployment at the cost of higher inflation. b. reduce inflation at the cost of a rise in the natural rate of unemployment. c. reduce inflation and leave the natural unemployment rate unchanged. d. reduce both inflation and unemployment. e. increase both inflation and unemployment. A- 2- A look at macroeconomic data across countries reveals that when economies experience recessions, unemployment rates rise, but wages fall very little, if at all. Which of the following is most likely to support the above observation? a. Wages are determined by the interaction of the forces of labor demand and supply. b. The demand for labor is derived demand and hence does not fall during recessions. c. The labor market usually exhibits perfectly competition. d. The labor supply curve becomes perfectly inelastic during recessions. e. Long term labor contracts make the wage rates sticky downwards. 3- A time-inconsistent monetary policy is one that: a. is set by congressional decree. b. is based on monetary targets established by law. c. changes over time as economic conditions change. d. follows a zero percent inflation rate. e. does not adapt to changing economic conditions. 4- Suppose workers do not believe the Fed will implement its announced monetary policy plans and the Fed wants to achieve low unemployment. In this situation the Fed would be best off: a. implementing a policy of high money growth. b. announcing and implementing a policy of low money growth. c. announcing a policy of high money growth and implementing a policy of low money growth. d. following a policy that forces the actual inflation rate below the expected inflation rate. e. promoting a low rate of inflation and adjusting actual policy plans to economic conditions. 5- The business cycle that results from the election campaign of incumbent politicians is called a: a. monetary business cycle. b. time consistent business cycle. c. political business cycle. d. real business cycle. e. historical business cycle. 6- A sudden technological breakthrough in an economy would: a. have no impact on real GDP. b. cause aggregate demand to fall. c. lower the natural rate of unemployment. d. increase the price level. e. cause aggregate supply to rise. 7-The change in the money supply in an economy is measured as: a. the difference between government deficit and government borrowing. b. the sum of a change in high-powered money and the change in tax revenues. c. the difference between government borrowing and government spending. d. the ratio of the change in excess reserves to the deposit expansion multiplier. e. the change in the government budget deficit. 8- Which of the following government agencies oversees monetary policy in the U.S.? a. The Federal Reserve System b. Congress c. The Treasury Department d. The Federal Trade Commission e. The Department of Commerce 9-Which of the following is the official policy-making body of the Federal Reserve System? a. Federal Advisory Council b. The U.S. Treasury c. The Federal Open Market Committee d. The Board of Governors e. The Federal Reserve district banks 10-During the Christmas holiday season, the Fed increases the supply of currency to: a. ensure that checks are cleared quickly. b. meet the demand for cash withdrawals from banks. c. stabilize the value of the dollar against other currencies. d. decrease the value of bonds. e. control inflation. 11-Which of the following is an intermediate target of the FedExplanation / Answer
ur answers are as follows:-
1. B
2. C
3. A
4. C
5. C
6. A
7. B
8. D
9. C
10. D
11. B
12. D
13. D
14. C
15. C
16. A
17. C
18. B
19. A
20. D
21. C
22. B
23. A
24. C
25. B
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