Midterm Qtr 1
Monetary Policy
Supply and Demand
Macro
Micro
100
Scarcity is only: __________________________________________________________________________________ a. a problem for people with not a lot of money __________________________________________________________________________________ b. a relationship between wants and resources __________________________________________________________________________________ c. a cost when money is limited __________________________________________________________________________________ d. an issue when things aren't abundant __________________________________________________________________________________
b. a relationship between wants and resources
100
Which of the following would NOT be included in M1? __________________________________________________________________________________ a. coins __________________________________________________________________________________ b. currency __________________________________________________________________________________ c. savings accounts __________________________________________________________________________________ d. checking accounts __________________________________________________________________________________
c. savings accounts
100
A shortage exists: __________________________________________________________________________________ a. when wants for a product exceed the amount available __________________________________________________________________________________ b. when the available amount of a product exceeds the wants for he product. __________________________________________________________________________________ c. at a price above the equilibrium __________________________________________________________________________________ d. at a price below the equilibrium __________________________________________________________________________________
d. at a price below the equilibrium
100
A recession is technically defined: __________________________________________________________________________________ a. when GDP increases for two consecutive months __________________________________________________________________________________ b. when GDP increases for two consecutive quarters __________________________________________________________________________________ c. when GDP decreases for six consecutive quarters __________________________________________________________________________________ d. when GDP decreases for six consecutive months __________________________________________________________________________________
d. when GDP decreases for six consecutive months
100
Which of the following are ways to increase human capital and expected income? __________________________________________________________________________________ a. sit in class and hope the time goes by quickly __________________________________________________________________________________ b. gain skills and knowledge through education and training __________________________________________________________________________________ c. hope that someone pays you a lot when you leave school __________________________________________________________________________________ d. be sure to enjoy school by partying as much as possible __________________________________________________________________________________
b. gain skills and knowledge through education and training
200
People choose because: __________________________________________________________________________________ a. wants compete for limited resources __________________________________________________________________________________ b. resources are insufficient to fulfill people's wants __________________________________________________________________________________ c. people can't have everything they want __________________________________________________________________________________ d. All of the answer choices __________________________________________________________________________________
d. All of the answer choices
200
Which of the following is NOT a function of the FED? __________________________________________________________________________________ a. banker to member banks __________________________________________________________________________________ b. banker to the general public __________________________________________________________________________________ c. banker to the US Government __________________________________________________________________________________ d. regulate the US money supply __________________________________________________________________________________
b. banker to the general public
200
Demand: __________________________________________________________________________________ a. is an amount __________________________________________________________________________________ b. is a relationship between price and quantity demanded __________________________________________________________________________________ c. increases when prices are increased __________________________________________________________________________________ d. decreases when prices are decreased __________________________________________________________________________________
b. a relationship between price and quantity demanded
200
Our economy can consider to be in an economic growth or expansion when: __________________________________________________________________________________ a. GDP is experiencing sustained growth. __________________________________________________________________________________ b. Unemployment is increasing. __________________________________________________________________________________ c. CPI is increasing. __________________________________________________________________________________ d. the FED is decreasing the money supply. __________________________________________________________________________________
a. GDP is experiencing sustained growth.
200
To achieve efficiency in a market economy, the 4 conditions that must exist are: __________________________________________________________________________________ a. Employment, Inflation, Growth, Stable Prices __________________________________________________________________________________ b. Buyers, Sellers, Supply, Demand __________________________________________________________________________________ c. Consumption, Investment, Government, Net Exports __________________________________________________________________________________ d. Competition, Information, Incentives, Property Rights __________________________________________________________________________________
d. Competition, Information, Incentives, Property Rights
300
If people pay a high price for an item, you know that: __________________________________________________________________________________ a. They are being ripped off. __________________________________________________________________________________ b. They have to have the item. __________________________________________________________________________________ c. They value the item more than the alternative use of their resources. __________________________________________________________________________________ d. They value the alternative use of their resources more than the opportunity cost of the item. __________________________________________________________________________________
c. They value the item more than the alternative use of their resources.
300
Which of the following would indicate that the money supply is too great? __________________________________________________________________________________ a. high rate of inflation __________________________________________________________________________________ b. business losses __________________________________________________________________________________ c. decrease in consumer confidence __________________________________________________________________________________ d. unemployment rate is increasing __________________________________________________________________________________
a. high rate of inflation
300
The greater the competition: __________________________________________________________________________________ a. among buyers, the higher the price. __________________________________________________________________________________ b. among sellers, the lower the price. __________________________________________________________________________________ c. among buyers and sellers, causes the price to be set at an equilibrium price. __________________________________________________________________________________ d. ALL of the answer choices. __________________________________________________________________________________
d. ALL of the answer choices.
300
Which of the following is NOT a goal of macroeconomic policy? __________________________________________________________________________________ a. a job for everyone who is willing and able to work __________________________________________________________________________________ b. keeping prices at an equilibrium for buyers and sellers __________________________________________________________________________________ c. no widespread, long term increases or decreases in overall prices __________________________________________________________________________________ d. an acceptable rate of increase in goods and services produced __________________________________________________________________________________
b. keeping prices at an equilibrium for buyers and sellers
300
If you buy a new laptop, the total cost of the choice to buy the car is: __________________________________________________________________________________ a. $1,500 __________________________________________________________________________________ b. $1,500 plus taxes and shipping charges __________________________________________________________________________________ c. what you would have done with the resources used to buy the car __________________________________________________________________________________ d. $1,500 plus taxes, shipping, and the price of the extended warranty __________________________________________________________________________________
c. What you would have done with the resources used to buy the car
400
Money makes exchange more efficient because it: __________________________________________________________________________________ a. reduces transaction costs __________________________________________________________________________________ b. raises prices __________________________________________________________________________________ c. creates a mutual coincidence of wants __________________________________________________________________________________ d. increases the supply of the product __________________________________________________________________________________
a. reduces transaction costs
400
If the FED increases the money supply, it is likely that: __________________________________________________________________________________ a. the supply of credit will increase __________________________________________________________________________________ b. the discount rates have decreased __________________________________________________________________________________ c. people will spend more __________________________________________________________________________________ d. ALL of the answer choices __________________________________________________________________________________
d. ALL of the answer choices
400
Which of the following cause an increase in the quantity exchanged of oatmeal? __________________________________________________________________________________ a. People learn to love oatmeal. __________________________________________________________________________________ b. The price of Cream of Wheat, a substitute, falls. __________________________________________________________________________________ c. The oat crop is a failure. __________________________________________________________________________________ d. The price of oats increases. __________________________________________________________________________________
a. People learn to love oatmeal.
400
The difference between nominal and real data is: __________________________________________________________________________________ a. Nominal data is always higher than real data __________________________________________________________________________________ b. Nominal data is adjusted for inflation while real is not __________________________________________________________________________________ c. Nominal data comes in a form of a number while real data is in a form of a percentage __________________________________________________________________________________ d. Real data is adjusted for price level changes while nominal is not __________________________________________________________________________________
d. Real data is adjusted for price level changes while nominal is not
400
What economic concept did Adam Smith suggest: __________________________________________________________________________________ a. Invisible hand __________________________________________________________________________________ b. Fiscal Policy __________________________________________________________________________________ c. Market Economy __________________________________________________________________________________ d. Productivity __________________________________________________________________________________
a. Invisible hand
500
According to the rule of 72, if you were to invest $100 at a 9% interest rate, about how many years would be required for the investment to be worth $200? __________________________________________________________________________________ a. 12 months __________________________________________________________________________________ b. 2 years __________________________________________________________________________________ c. 5 years __________________________________________________________________________________ d. 8 years __________________________________________________________________________________
d. 8 years 72/9 = about 8 years
500
When the FED lowers the reserve requirement, that action: __________________________________________________________________________________ a. makes more money available for banks to loan out __________________________________________________________________________________ b. makes more money that the bank has to keep in their vault __________________________________________________________________________________ c. makes less money available for banks to loan out __________________________________________________________________________________ d. restricts the interest rate that the banks can charge for loans __________________________________________________________________________________
a. makes more money available for banks to loan out
500
Which is NOT a determinant of price elasticity of demand? __________________________________________________________________________________ a. availability of substitutes __________________________________________________________________________________ b. percentage of income __________________________________________________________________________________ c. ability to transfer resources __________________________________________________________________________________ d. time __________________________________________________________________________________
c. ability to transfer resources
500
Which of the following would be studied in a macroeconomics course? __________________________________________________________________________________ a. determining the price of tires __________________________________________________________________________________ b. determining employment __________________________________________________________________________________ c. productivity of the manufacturing of automobiles __________________________________________________________________________________ d. maximizing the profit of Apple on iPods __________________________________________________________________________________
b. determining the employment
500
What is the strength of our market economy? __________________________________________________________________________________ a. Security __________________________________________________________________________________ b. Growth __________________________________________________________________________________ c. Efficiency __________________________________________________________________________________ d. Freedom __________________________________________________________________________________
c. Efficiency
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