A lowering of the required reserve ratio might not expand the money supply if:
a. tax rates are also lowered at the same time.
b. tax rates are increased at the same time.
c. borrowers are unwilling to borrow the new funds the banks have available for loans.
d. borrowers are willing to borrow the new funds the banks have available for loans..
e. borrowers expand their borrowing because of the lower interest rates that banks offer.
The quantity theory of money of the Classical economists says that a change in the
money supply will produce a:
a. proportional change in the price level.
b. greater than proportional change in the price level.
c. less than proportional change in the price level.
d. wide variation in the velocity of money.
Which of the following will most likely cause an increase in the aggregate supply
curve?
a. a reduction in the general level of prices
b. an increase in the general level of prices
c. an improvement in technology that substantially reduces the cost of generating
energy
d. an increase in taxes that makes it more expensive for Americans to import crude oil
Gyro’s Shop reported a net loss of $15,000 and total expenses of $80,000. How much
are total revenues?
a. $ 15,000
b. $ 65,000
c. $ 95,000
d. The answer cannot be determined from the information given.
A barter economy is one in which:
a. money serves as a medium of exchange.
b. only precious metals are accepted as money.
c. goods are traded directly for other goods.
d. paper money is backed by gold.
The Fed’s power to set the required reserves of commercial banks:
a. provides a certain source of interest income for commercial banks.
b. allows the Fed to control the lending ability of commercial banks and, thereby,
control the money supply.
c. prevents banks from hoarding too much vault cash.
d. prevents commercial banks from earning excess profits.
Government expenditures as a share of the U.S. economy are:
a. the largest in the world.
b. the smallest in the world.
c. smaller than most Western European countries.
d. larger than Canada, France, and the United Kingdom but slightly smaller than
Germany and Italy.
The unemployment rate equals the number of persons:
a. unemployed divided by the number employed.
b. unemployed divided by the number in the labor force.
c. unemployed divided by the population age 16 and over.
d. not working divided by the population age 16 and over.
The silly clothes worn by a circus clown are an example of:
a. a natural resource.
b. capital goods.
c. labor.
d. entrepreneurship.
If the demand for a good decreased, what would be the effect on the equilibrium price
and quantity?
a. Price would increase, and quantity would decrease.
b. Price would decrease, and quantity would decrease.
c. Price would increase, and quantity would increase.
d. Price would decrease, and quantity would increase.
Real investment spending for the past 35 years is less volatile than real personal
consumption.
If people become pessimistic about the state of the economy, the consumption function
shifts downward.
In the United States, the unemployment rate for women is roughly the same as the
unemployment rate for men.
The tax multiplier equals 1 – spending multiplier.
Every economic choice has an opportunity cost.
What is the purpose of an income statement?
Describe the differences between capitalism and socialism.