Which of the following is not a component of the M1 money supply?
a. Demand deposits.
b. Large-denomination (more than $100) bills.
c. Interest-earning checking deposits.
d. Outstanding balances on credit cards.
The natural rate of unemployment occurs if there is no:
a. unemployment.
b. frictional unemployment.
c. structural unemployment.
d. cyclical unemployment.
Exhibit 15-7 Lower Walloon National Bank AssetsLiabilities
Reserves $10,000 Checkable deposits $10,000 In Exhibit 15-7, if the required reserve
ratio is 20 percent, and Mr. Brown deposits $10,000 in Lower Walloon National Bank.
The Lower Walloon National bank has excess reserves of:
a. $2,000.
b. $8,000.
c. $0.
d. $10,000.
e. $40,000.
Which of the following is a normative statement?
a. The deduction for state taxes cost the federal government $100 billion per year.
b. Taxpayers in North Carolina pay state taxes which are above the national average.
c. Twenty-two states use a lottery to raise state taxes.
d. Congress is considering the president’s tax plan to increase taxes which is a fair plan.
Which economist(s) first identified an inverse relationship between inflation and
unemployment?
a. Robert Lucas and Thomas Sargent.
b. W. Phillips.
c. Robert Barro.
d. Paul Samuelson.
e. Arthur Laffer.
When the U. S. federal government runs a budget deficit, it borrows money by selling:
a. Treasury bills, notes, and bonds.
b. publicly owned land.
c. its gold reserves.
d. financial assets located in foreign banks.
The period of growth in real GDP between the trough of the business cycle and the next
peak is called the:
a. recessionary phase.
b. recovery phase.
c. contractionary phase.
d. cyclical phase.
The Federal Reserve Board of Governors consists of:
a. 50 members selected by state legislatures.
b. 12 members, one from each Federal Reserve District.
c. 12 members nominated by the President and confirmed by the Senate.
d. seven members elected by Congress.
e. seven members nominated by the President and confirmed by the Senate.
Which organization, in addition to the Financial Accounting Standards Board (FASB),
occasionally issues authoritative rules for financial statements?
a. The Accounting Profession
b. International Accounting Standards Board (IASB)
c. Securities and Exchange Commission (SEC)
d. Internal Revenue Service (IRS)
Which of the following is not a reason for the downward slope of an aggregate demand
curve?
a. Real balances effect.
b. Real interest-rate effect.
c. Net exports effect.
d. All of these are reasons.
Exhibit 8-5 Aggregate expenditures function
As shown in Exhibit 8-5,
the marginal propensity to consume (MPC) is:
a. 0.33.
b. 0.50.
c. 0.67.
d. 0.75.
When depreciation is subtracted from:
a. personal income, we get national income.
b. gross domestic product, we get national income.
c. gross domestic product, we get personal income.
d. disposable personal income, we get gross domestic product.
Monetarists believe that:
a. velocity is constant.
b. velocity is highly predictable.
c. there are three motives for demanding money.
d. changes in the money supply cause changes in velocity.
e. a change in the money supply can affect real GDP.
If society leaves some of its resources unemployed, then it will be operating at a point:
a. beneath its production possibilities curve.
b. at a corner of its production possibilities curve.
c. anywhere along its production possibilities curve.
d. outside of its production possibilities curve.
Using the income approach, an indirect business tax is a(n):
a. sales tax.
b. excise tax.
c. license fee.
d. all of these.
An increase in the price level, other things remaining the same, may be expected to
result in ____ the consumption function.
a. a downward shift of
b. a movement along
c. an upward shift in
d. no effect on
The reliability of the information in a company’s financial statements is the
responsibility of which of the following?
a. The Securities and Exchange Commission (SEC)
b. The Certified Public Accountant in charge of the audit of the company’s financial
statements
c. The company’s management
d. The stockholders of the company
A change in a third variable not on either axis of a graph is illustrated with a:
a. horizontal or vertical line.
b. movement along a curve.
c. shift of a curve.
d. point of intersection.