Which of the following is a role of a financial intermediary?
a. Increasing risk to lenders
b. Combining a large number of loans of small borrowers into a small number of
deposits of large savers
c. Decreasing liquidity for savers
d. Reducing risk to depositors
e. Increasing interest rates for both borrowers and lenders
The Federal Open Market Committee is important because
a. its deliberations are extremely private
b. it sets the course for the nation’s money supply
c. it is composed of people who are most knowledgeable about the economy
d. it discusses unemployment and inflation
e. of its influence on fiscal policy
A decrease in the price level
a. decreases investment spending, thereby shifting the AD curve.
b. increases investment spending, thereby shifting the AD curve.
c. does not shift the AD curve.
d. increases autonomous consumption spending, thereby shifting the AD curve.
e. changes the slope of the AD curve.
The precise definition of GDP is the total value of all
a. goods and services produced by a nation, minus household labor
b. goods and services produced by a nation, minus depreciation
c. goods and services produced for the marketplace during a given period
d. final goods and services produced for the marketplace during a given period, within a
nation’s borders
e. final goods and services produced within a nation’s borders and by this nation’s
citizens abroad during a given period
All of the following are examples of stock variables except one. Which one?
Within the context of the housing market, what does MBS stand for?
If labor supply and labor demand both increase, employment
a. and the real wage rate will both increase
b. will increase but the real wage rate will fall
c. will increase but the real wage rate will remain constant
d. and the real wage rate will remain constant
e. will increase but the effect on the real wage rate will depend on the magnitude of the
shifts
The core problem faced by all economic systems is that
If the demand for good A is more elastic than the demand for good B, a small decrease
in supply in both markets will cause
Which of the following is not included in the M1 money stock?
a. small time deposits
b. demand deposits
c. checking account deposits
d. travelers’ checks
e. cash in the hands of the public
Real GDP is nominal GDP
a. plus depreciation
b. adjusted for changes in the price level
c. minus depreciation
d. minus taxes
e. minus inflation
For which of the following is demand likely to be the most price elastic?
If we know that the exchange rate is $1.60 per pound then the exchange rate of pounds
per dollar is
a. greater than 1.60
b. 0.80
c. 1.00
d. 0.625
e. 1.60