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[SOLVED] Macroeconomics questions

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Question 1 (1 point)

 Question 1 Unsaved
The actual change in the money supply equals


Question 2 (1 point)

 Question 2 Unsaved
The required reserve ratio equals 10 percent and all banks initially have zero excess reserves. The Fed buys $1 million in U.S. government securities. The most the money supply can increase is


Question 3 (1 point)

 Question 3 Unsaved
The more people decide to hold currency, the


Question 4 (1 point)

 Question 4 Unsaved
The discount rate is the


Question 5 (1 point)

 Question 5 Unsaved
The most precise way the Fed has to control the money is


Question 6 (1 point)

 Question 6 Unsaved

According to the above figure, a shortage is shown between which two points?


Question 7 (1 point)

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A decrease in demand and a decrease in supply will lead to a


Question 8 (1 point)

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If the current price of a market basket of goods is $850 and the base year price for the same market basket is $500, what is the value of the price index?


Question 9 (1 point)

 Question 9 Unsaved
The only way that a society can produce outside the production possibilities curve is


Question 10 (1 point)

 Question 10 Unsaved
Suppose the tax rate on the first $10,000 income is 0; 10 percent on the next $20,000; 20 percent on the next $20,000; 30 percent on the next $30,000; and 40 percent on any income over $80,000. Family A has income of $40,000 and Family B has income of $100,000. What is the marginal and average tax rate for each family?


Question 11 (1 point)

 Question 11 Unsaved
The marginal tax rate is equal to


Question 12 (1 point)

 Question 12 Unsaved
One solution to the Social Security problem cited in the text is to


Question 13 (1 point)

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Social Security taxes are regressive because

Question 14 (4 points)

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Assume an open, mixed economy (C + I + G + X = real GDP) and an MPS of .2 What is the multiplier? 


Question 15 (1 point)

 Question 15 Unsaved
The U.S. fiduciary monetary system


Question 16 (1 point)

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Refer to the above table. The value of M1 is


Question 17 (1 point)

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Possession of information by one party in a financial transaction but not by the other party is


Question 18 (1 point)

 Question 18 Unsaved
The Federal Reserve bank is managed by


Question 19 (1 point)

 Question 19 Unsaved
As a “lender of last resort” the Fed


Question 20 (1 point)

 Question 20 Unsaved
Required reserves are


Question 21 (1 point)

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A bank with deposits of $500 million has $75 million in cash on hand, $50 million in deposits with the Fed, and $80 million in government securities. If the reserve requirement is 15 percent, the bank has excess reserves of


Question 22 (1 point)

 Question 22 Unsaved
A bank with $100 million in deposits has $6 million in vault cash, $6 million on deposit with the Fed, and $6 million in government securities. The reserve requirement is 20 percent. A person deposits a check for $10 million drawn on another bank. The maximum loan this bank can make once the check clears is


Question 23 (1 point)

 Question 23 Unsaved
Assuming a reserve ratio of 10 percent, if a bank sells $100,000 in securities how much can the bank loan out?


Question 24 (1 point)

 Question 24 Unsaved
When the Fed buys a U.S. bond in the open market


Question 25 (1 point)

 Question 25 Unsaved
The Fed buys securities and gives a bond dealer a check for the amount. After the check has cleared,


Question 26 (1 point)

 Question 26 Unsaved
The required reserve ratio is 20 percent. The bank of a bond dealer has $100 million in deposits, $10 million in vault cash, $10 million in deposits with the Fed, and $10 million in government securities. The Fed buys $1 million in securities from the bond dealer. As a result of the transaction,


Question 27 (1 point)

 Question 27 Unsaved
A purchase of U.S. government securities by the Fed causes


Question 28 (1 point)

 Question 28 Unsaved
Fiscal policy is


Question 29 (1 point)

 Question 29 Unsaved
Automatic stabilizers work by


Question 30 (1 point)

 Question 30 Unsaved
Which of the following represent expansionary fiscal policy?


Question 31 (1 point)

 Question 31 Unsaved
If the economy is experiencing an inflationary gap and the government wants to accelerate the adjustment to the long-run equilibrium, it should


Question 32 (1 point)

 Question 32 Unsaved
Which of the following actions could be undertaken if the government wants to close a recessionary gap?


Question 33 (1 point)

 Question 33 Unsaved
Suppose the government increases lump-sum taxes. This causes


Question 34 (2 points)

 Question 34 Unsaved

Refer to the above figure. An increase in taxes will lead to a(n)


Question 35 (2 points)

 Question 35 Unsaved

Refer to the above figure. Suppose the economy is operating at point A. There is a recessionary gap of ________, which can be closed by ________.


Question 36 (1 point)

 Question 36 Unsaved
If the government increases spending but doesn’t raise taxes,


Question 37 (1 point)

 Question 37 Unsaved
If the supply of investment funds is horizontal and the government increases spending by $200 billion, the change in real GDP will be (assuming a marginal propensity to consume of 0.8)


Question 38 (1 point)

 Question 38 Unsaved
Expansionary fiscal policy falls short of its goal. Some economists claim it is due to indirect crowding out. What evidence is consistent with this claim?


Question 39 (1 point)

 Question 39 Unsaved
If the economy is below its full-employment level of real GDP, a supply-side economist would argue the appropriate policy is


Question 40 (1 point)

 Question 40 Unsaved
Suppose there are two policy options facing a vote in the Senate. In the first, government spending will increase $50 billion, while the second option is to cut taxes by $50 billion. A Keynesian economist would argue for


Question 41 (1 point)

 Question 41 Unsaved
The government spends exactly what it receives in taxes is


Question 42 (1 point)

 Question 42 Unsaved
The difference between the gross public debt and the net public debt is that the


Question 43 (1 point)

 Question 43 Unsaved
Which of the following statements is true about the public debt and future generations?


Question 44 (1 point)

 Question 44 Unsaved
In the short-run, a budget deficit, when the economy has a recessionary gap, can


Question 45 (1 point)

 Question 45 Unsaved
What happens when the government imposes a unit excise tax on a good?

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