A Good Can Serve As Money Only If

Question:

Answer: B. GDP per capita of poor countries will grow more rapidly than in rich countries

Question: A general formula for the multiplier is:

  1. 1/(1-MPS)

  2. B.1/MPC

  3. C.1/MPS

  4. D.1/(MPS-1)

  5. Answer: C. 1/MPS

  6. Question: If planned aggregate expenditure is less than total production,

  7. A. Actual inventories will equal planned inventories

  8. B. Firms will experience an unplanned decrease in inventories

  9. C. GDP will decrease

  10. D. The economy is in equilibrium

  11. Answer: C. GDP will decrease

  12. Question: Which of the following is not counted in M1?

  13. A. Checking account balances

  14. B. Credit card balances

  15. C. Coins in circulation

  16. D. currency in circulation

  17. Answer: B. Credit card balances

  18. Question:

  19. Answer: C. Open market operations, discount policy, and reserve requirements

  20. Question:

  21. Answer: A. Economic growth, but not an increase in living standards

  22. Question: The key idea of the aggregate expenditure model is that in any particular year, the level of GDP is determined mainly by

  23. A. Investment spending.

  24. B. Export spending.

  25. C. Government spending.

  26. D. The level of aggregate expenditure.

  27. Answer: D. The level of aggregate expenditure

  28. Question: Consumption spending is $5 million, planned investment spending is $8 million, unplanned investment spending is $2 million, government purchases are $10 million, and net export spending is $2 million. What is aggregate expenditure?

  29. A. $15 million

  30. B. $23 million

  31. C. $25 million

  32. D. $27 million

  33. Answer: C. $25 million

  34. Question:

  35. Answer: B. Little to no intrinsic value and is authorized by the central bank or governmental body

  36. Question: Which of the following is not a function of the Federal Reserve System, or the “Fed”?

  37. A. Acting as a lender of last resort

  38. B. Acting as a banker’s bank

  39. C. Performing check clearing services

  40. D. Insuring deposits in the banking system

  41. Answer: D. Insuring deposits in the banking system

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