The opportunity cost of holding money A) refers to the amount of paper currency held by the Fed. B) is measured by the alternative interest yield obtainable by holding some other asset. C) is based on the fiduciary monetary system. D) refers to the Fed’s role as the lender of last resort. ANSWER B
Date: September 2nd, 2020
Which of the following is likely to happen due to quantitative easing by the Fed? A) A rightward shift of the demand curve for bank reserves B) A leftward shift of the supply curve of bank reserves C) A leftward shift of the demand curve for bank reserves D) A rightward shift of the supply […]
Date: September 2nd, 2020
The short-run aggregate supply curve in modern Keynesian analysis represents the relationship between A) the real output of goods and services in the economy and the price level when people have fully adjusted their behavior. B) the nominal output of goods and services and the real output of goods and services. C) the real output […]
Date: September 2nd, 2020
The circular flow diagram implies that if accounting is done correctly, ________. A) the flow of income must exceed the implied value of the factors of production B) the implied value of the factors of production must exceed the flow of income C) the flow of expenditure must equal the income of the households making […]
Date: September 2nd, 2020
Assuming all else equal, if a firm decides to pay more dividends and lowers the amount of retained earnings it holds, it will cause: A) an upward movement along the current credit supply curve of the firm. B) a downward movement along the current credit supply curve of the firm. C) the current credit supply […]
Date: September 2nd, 2020
The aggregate production function used in the Solow model expresses GDP as a function of: A) level of technology and total efficiency units of labor only. B) physical capital and level of technology. C) physical capital and total efficiency units of labor only. D) physical capital, level of technology, and total efficiency units of labor. […]
Date: September 2nd, 2020
Which among the following will happen if the Fed buys bonds from a private bank? A) The private bank’s total assets will decrease. B) The Fed’s total assets will decrease. C) The private bank’s total assets will increase. D) The Fed’s total liabilities will increase. ANSWER D
Date: September 2nd, 2020
At the equilibrium rate of interest: A) the quantity of credit demanded falls short of the quantity of credit supplied. B) the quantity of credit demanded equals the quantity of credit supplied. C) the quantity of credit demanded is zero. D) the quantity of credit supplied is zero. ANSWER B
Date: September 2nd, 2020
A persistent decline in the price level resulting from economic growth in the presence of stable aggregate demand is known as A) secular deflation. B) the interest rate effect. C) the real balance effect. D) demand-side deflation. ANSWER A
Date: September 2nd, 2020
Limiting protectionism means A) reducing political dishonesty. B) reducing consumer fraud. C) reducing trade barriers. D) reducing corruption. ANSWER C
Date: September 2nd, 2020
