Some early forms of money, like commodity money, did not survive because A) they were outlawed. B) quality control was difficult. C) people disagreed on which good to use. D) paper quality was poor. ANSWER B
Date: September 10th, 2020
Current Federal Reserve policy focuses on interest rates, rather than on monetary aggregates, because ________. A) monetary aggregates do not provide clear or consistent signals to guide policymakers B) open market operations affect interest rates more directly than they affect monetary aggregates C) according to the Fisher effect, the interest rate is a key determinant […]
Date: September 10th, 2020
Distorting taxes can invalidate Ricardian equivalence because A) they confuse consumers about the need for government to repay its debt. B) alternative ways of collecting the same tax revenue produce different amounts of lost welfare. C) they are inferior to lump-sum taxes. D) they are more popular, politically, than lump-sum taxes. ANSWER B
Date: September 10th, 2020
A good is inferior for a consumer if A) it is never included in his or her consumption bundle. B) its consumption rises when income rises. C) its consumption falls when income rises. D) some minimal level of the good must be consumed to assure the consumer’s survival. ANSWER C
Date: September 10th, 2020
Which of these transactions results in an increase in M1? A) withdrawal of $100 cash from your checking account B) certificate of deposit matures, adding $520 to your checking account C) depositing a bank loan of $400 into your savings account D) depositing a $300 paycheck into your savings account E) none of the above […]
Date: September 10th, 2020
The Long-Run Phillips Curve is vertical, suggesting that ________. A) allowing inflation to rise will not succeed in keeping unemployment low B) changes in unemployment have no lasting impact on inflation C) shifts of the short-run Phillips curve impact inflation, but have no effect on unemployment D) all of the above E) none of the […]
Date: September 10th, 2020
The financial innovation of numerical credit scoring contributed to the ________. A) “democratization of credit” B) reduction of loan-to-value ratios C) “depersonalization of credit” D) reduction of information asymmetries ANSWER A
Date: September 10th, 2020
The major disadvantage of commodity money is that A) anybody can issue it and walk away. B) its value fluctuates with the scarcity of the commodity. C) it is subject to dollarization. D) the central bank cannot be prevented from issuing too much of it. ANSWER B
Date: September 10th, 2020
Which of these transactions results in an increase in M2? A) certificate of deposit matures, adding $520 to your checking account B) withdrawal of $100 cash from your checking account C) depositing a bank loan of $400 into your savings account D) depositing a $300 paycheck into your savings account E) none of the above […]
Date: September 10th, 2020
A consumption bundle A) is a particular combination of consumption and leisure. B) only measures a quantity of goods and services, but not the amount of leisure. C) is a method of bringing home consumption goods. D) measures the quality of a particular good. ANSWER A
Date: September 10th, 2020
