Exam 5: Economic Activity

An increase in reserve requirements by the Federal Reserve would decrease the money supply.

The quantity theory of money states that as the supply of money increases relative to the demand for money, people will make adjustments in their portfolios of assets. First, they will buy bonds, stocks, and then real assets.

Fiscal policy is implemented by:

When comparing international growth in real GDP between 2000 and 2009 among the United States, Japan, China, Germany, and the United Kingdom, the United States clearly is at the top of the group of countries.

An economic forecast will usually start with an analysis of the government's economic plan.

President George W. Bush took office in January of 2001 and inherited a crumbling economy that went into recession in March of 2001.

If the government would stick to the goals of the Employment Act of 1946, economic policy would be coordinated.

During recessions, it is common for imports to increase because people buy more cheap foreign goods.

The breakdown of U.S. Gross Domestic Product into its major categories is usually as which of the following?

All of the following are goals of monetary and fiscal policy, except:

The change in real GDP is often inversely related to inflation.

In the last few years (since 2001), the trade deficit has increased dramatically.

The composite index of leading indicators, made up of ten leading indicators, has historically

Expansions of economic activity during the eight peace time business cycles from February 1945 to November of 2001 have averaged approximately 63 months.

The U.S. budget deficit has been steadily growing since the beginning of 2001 because of the recession, tax cuts, and the war in Iraq.

Coincident indicators are of major importance to investors because they accurately predict the timing of business cycle changes.

The Federal Reserve Bank's buying and selling of securities for its own portfolio is known as open-market operations.

According to the traditional definitions, a recession is two or more quarters of:

One sign that the recession beginning in 1990 was very painful was that many large companies such as AT&T, IBM, and GM announced significant reductions in their work forces.

Real GDP and the Consumer Price Index appear to move up and down together.