Which of the following is the correct date format for the financial statement heading?
a. Balance sheet for the year ended June 30, 2015
b. Income statement at December 31, 2015
c. Balance sheet at December 31, 2015
d. Statement of retained earnings at December 31, 2015
Which of the following policy actions by the Fed would cause the money supply to
increase?
a. An open market sale of government securities.
b. An increase in required reserve ratios.
c. An increase in the discount rate.
d. An open-market purchase of government securities.
Exhibit 15-6 Balance sheet of Tucker National Bank Assets Liabilities
Required reserves $ 20,000 Checkable deposits $200,000
Excess reserves 0
Loans 180,000
Total Total Suppose Connie Rich deposits $100,000 into her checking account in the
bank shown in Exhibit 15-6. The result would be a:
a. zero change in required reserves.
b. $10,000 increase in required reserves.
c. $100,000 increase in required reserves.
d. $20,000 increase in excess reserves.
Using the income approach, general sales taxes, excise taxes, customs duties, business
property taxes, and license fees are termed:
a. indirect business taxes.
b. regressive taxes.
c. disproportionate taxes.
d. capital depreciation.
e. progressive taxes.
Assuming that automobiles are normal goods, a rise in consumer income, other things
being equal, will cause:
a. the demand curve for automobiles to shift to the left.
b. the demand curve for automobiles to shift to the right.
c. a downward movement along the demand curve for automobiles.
d. an upward movement along the demand curve for automobiles.
Use the aggregate expenditures model and assume the marginal propensity to consume
(MPC) is 0.80. A decrease in government spending of $1 billion would result in a
decrease in GDP of:
a. $0.
b. $0.8 billion.
c. $1.0 billion.
d. $5.0 billion.
e. $8.0 billion.
Which of the following statements is true?
a. The speculative demand for money at possible interest rates gives the demand for
money curve its upward slope.
b. There is an inverse relationship between the quantity of money demanded and the
interest rate.
c. According to the quantity theory of money, any change in the money supply will have
no effect on the price level.
d. All of these are true.
When the rate of cyclical unemployment is zero, the:
a. natural rate of unemployment must also be zero.
b. rate of frictional unemployment must be negative.
c. economy must have entered a recessionary stage.
d. Keynesian aggregate supply curve must be horizontal.
e. economy is considered to be at full employment.
Which one of the following business decisions will leastlikely require financial
information?
a. The Gulf Coast Bank is reviewing the loan application from Tuo’s Restaurant.
b. Tuo’s Restaurant is attempting to sell its stock to the public.
c. The labor union representing Flaggler’s Fitness Spa employees is negotiating a pay
raise as part of a new labor agreement.
d. Tuo’s Restaurant management is deciding whether to wash its catering vans today or
tomorrow.
Taryn Corporation The accountant for Taryn Corporation prepared the following list of
account balances from the company’s records for the year ended December 31, 2014:
Read the information for Taryn Corporation. Determine the following amounts for
Taryn Corp. A) Total assets at the end of 2014
B)Totalliabilitiesattheendof2014_________________________ C) What
parties have a claim on Taryn Corporation’s assets? Explain you
answer in the terms of the accounting equation.
Assume a simplified banking system subject to a 10 percent required reserve ratio. If
there is an initial increase in excess reserves of $90,000 and all possible loans are made,
the money supply:
a. increases $90,000.
b. increases $900,000.
c. increases $990,000.
d. decreases $90,000.
Suppose that last year you borrowed $100 at 5 percent interest to purchase a $100 pair
of Nike cross-training shoes. This year you repaid the bank with interest. If the inflation
rate was 10 percent last year, your purchase of the shoes would:
a. make you an inflation winner as you saved $5 on the shoes.
b. make you an inflation loser as you paid $5 more than you should have for the shoes.
c. not be affected at all by the inflation rate.
d. be taxed according to COLA adjustments.
e. make you an inflation loser because of bracket creep.
If the marginal propensity to save (MPS) is 0.10, the value of the spending multiplier is:
a. 1.
b. 9.
c. 10.
d. 90.
The father of modern economics that wrote The Wealth of Nations is:
a. Karl Marx
b. John Maynard Keynes
c. Adam Smith
d. Thorstein Veblen
Suppose Tucker Inc. is willing to sell one gizmo for $10, a second gizmo for $15, a
third for $20, and the market price is $25. What is Tucker Inc.’s producer surplus?
a. $10
b. $15
c. $30
d. $50
Suppose a U.S.-made machine costs $500 and the exchange rate is 100 yen = $1. A
Japanese citizen purchasing this machine would pay:
a. 100 yen.
b. 500 yen.
c. 5,000 yen.
d. 10,000 yen.
e. 50,000 yen.
Exhibit 17-5 Short-run and long-run Phillips curve
Suppose
the government shown in Exhibit 17-5 uses contractionary monetary policy to reduce
inflation from 9 to 6 percent. If people have adaptive expectations, then:
a. the economy will remain stuck at point E1.
b. the natural rate will permanently increase to 8 percent.
c. unemployment will rise to 8 percent in the short run.
d. unemployment will remain at 6 percent as the inflation rate falls.
The point at which real output reaches a maximum during a business cycle is called the:
a. peak.
b. recession.
c. recovery.
d. trough.
Rogers Corporation starts the year with a Retained Earnings balance of $55,000. Net
income for the year is $27,000. The ending balance in Retained Earnings is $70,000.
What was the amount of dividends declared and paid for the year?
The opportunity cost of holding money is properly measured by the rate of interest on
financial assets such as bonds.
If two variables are inversely related, then they change in the same direction.
Presented below are condensed data from the financial statements of Laugh Factory for
2015 and 2014. The figures are expressed in thousands. Use this information to answer
the questions that follow.
The marginal propensity to consume (MPC) is the change in consumption divided by
the change in income.
According to the law of supply, price and quantity supplied are inversely related,
ceteris paribus.
As the investment demand curve becomes steeper, the crowding-out effect will become
smaller.