Business Economics I
This agency regulates the money flow in an economy. Its customers are commercial banks and the Government.
b. The Fed (Federal Reserve Bank)
An adjustment to your fixed salary that helps to prevent inflation from eroding its value.
B. COLA (cost of living adjustment)
Which of the following is not an economic indicator?
A. Inflation Rate
B. COLA
B. Cola
What does inflation do?
A. Results in a depressed economy
B. Reduces the purchase power of money
B. Reduces the purchase power of money
Which of the following is not a characteristic of a recession?
A. Consumers buy less
B. A is correct
B. A is correct
When this policy is initiated, the hope is that there will be a lot of money available at a relatively low interest rate.
C. Loose Monetary Policy
The percent of people not currently working that are actively looking for work.
C. Unemployment Rate
The CPI is based on price changes over a period of time. The base year is currently...
A. 1984
B. 1988
A. 1984
Which situation would result in a reduced standard of living for someone of Social Security?
A. COLA < Inflation
B. COLA > Change in CPI
A. COLA < Inflation
If the economy is in a high inflationary period, which of the following would the Fed most likely do?
A. Decrease gov't spending, increase interest rates
B. Decrease gov't spending, decrease interest rates
B. Decrease gov't spending, decrease interest rates
This is the amount that banks must keep on hand in the vault. The higher the amount being held in the bank, the less that's available for lending to customers.
A. Reserve Requirement
This measures the dollar of all goods and services produced in a nation in a single year. it is used to determine if a country is growing.
D. GDP (Gross Domestic Product)
The general CPI measures the change in what?
A. Things that make up a standard of living
B. A basket of goods
B. A basket of goods
Which of the following would be counted in the unemployment rate?
A. People who can't find a new job
B. People that can't work due to a disability
A. People who can't find a new job
If the economy is in a severe recession, which of the following would the Fed most likely do?
A. Increase gov't spending, reduce interest rates
B. Decrease gov't spending, increase interest rates
A. Increase gov't spending, reduce interest rates
This is the rate the Fed charges member banks. It affects the rates passed onto the customer.
A. Discount Rate
When this policy is initiated, the hope is that there will be consumer savings, fewer new businesses, and less spending.
E. Tight Monetary Policy
What does the CPI tell you?
A. How much prices have gone up over a specific period of time
B. What your COLA should be for next year
A. How much prices have gone up over a specific period of time
Which of the following does not happen during inflation?
A. Less money circulates through the economy
B. Everyone is expanding homes and businesse
A. Less money circulates through the economy
When would the gov't begin to initiate a loose monetary policy?
A. When people are spending too much (high demand)
B. When there is a rising unemployment rate
B. When there is a rising unemployment rate
The quality and quantity of goods and services distributed to people in a specific population.
B. Standard of Living
This is considered the increase in social security payment each year.
B. COLA
What does the inflation rate measure?
A. Changes in the GDP from one year to the next
B. Changes in the CPI from one year to the next
B. Changes in the CPI from one year to the next
Which does happen during an inflationary period?
A. There is usually high demand
B. There is usually high supply
B. There is usually high supply
Who is the Chairman of the Federal Reserve Bank?
A. Dr. Greenspan
B. Dr. Yellen
B. Dr. Yellen ( It is now really Dr. Powell - test is outdated - use Dr. Yellen on the test.