Question 1

Which of the following is true of a covered bond?

Accepted Answer

A) A covered bond is the same as a mortgage-backed security except that it is popular in the United States than in Europe. 
B) In case of covered bonds, the obligation of the loan remains with the originating bank that gives out the loan. 
C) In case of covered bonds, the obligation of the loan immediately transfers to the institution taking the loan. 
D) A covered bond is the same as a mortgage-backed security except that it is popular in the Europe than in the United States. 
A) A covered bond is the same as a mortgage-backed security except that it is popular in the United States than in Europe. 
B) In case of covered bonds, the obligation of the loan remains with the originating bank that gives out the loan. 
C) In case of covered bonds, the obligation of the loan immediately transfers to the institution taking the loan. 
D) A covered bond is the same as a mortgage-backed security except that it is popular in the Europe than in the United States.

Question 2

The government of Imbrusia introduces new taxes and cuts spending to mitigate recession. Which of the following is likely to happen in Imbrusia according to the Keynesians?

Accepted Answer

A) Increase in investment 
B) Increase in consumption 
C) Increase in inflation 
D) Increase in unemployment 
A) Increase in investment 
B) Increase in consumption 
C) Increase in inflation 
D) Increase in unemployment

Question 3

Which of the following is one of the main causes of the fiscal crisis in Greece?

Accepted Answer

A) Greece experienced high birth rate and low death rate between 2000 and 2010. 
B) Greece had a high national debt and high deficits prior to the crisis. 
C) Greece did not have a strong labor force to support production. 
D) Greece's prime minister did not have the desire to tackle difficult structural issues. 
A) Greece experienced high birth rate and low death rate between 2000 and 2010. 
B) Greece had a high national debt and high deficits prior to the crisis. 
C) Greece did not have a strong labor force to support production. 
D) Greece's prime minister did not have the desire to tackle difficult structural issues.

Question 4

The European Economic Community was set up to _____.

Accepted Answer

A) establish a single currency throughout its member nations 
B) establish travel and trade rules throughout its member nations 
C) establish strict trade barriers prohibiting outside trade by its member nations 
D) establish a powerful government to govern all its member nations 
A) establish a single currency throughout its member nations 
B) establish travel and trade rules throughout its member nations 
C) establish strict trade barriers prohibiting outside trade by its member nations 
D) establish a powerful government to govern all its member nations

Question 5

In which year did the unemployment rate in Germany fall compared to the EU-27 average?

Accepted Answer

A) 2006 
B) 2007 
C) 2008 
D) 2010 
A) 2006 
B) 2007 
C) 2008 
D) 2010

Question 6

The per capita GDP in Italy declined steadily between 2000 and 2010. One of the main causes of this crisis is that

Accepted Answer

A) Italy's national debt was relatively low prior to the crisis. 
B) the birth rate in Italy plummeted during the period. 
C) tax evasions by individuals and businesses were very pervasive during the period. 
D) the pension system in Italy could not support the increasing number of retired workers during the period. 
A) Italy's national debt was relatively low prior to the crisis. 
B) the birth rate in Italy plummeted during the period. 
C) tax evasions by individuals and businesses were very pervasive during the period. 
D) the pension system in Italy could not support the increasing number of retired workers during the period.

Question 7

Which of the following policies did the United States undertake to mitigate the Great Recession?

Accepted Answer

A) It approached the European Central bank to purchase its debts at low rates. 
B) It engaged in target asset relief programs. 
C) It induced implosions in deficits through fiscal policies. 
D) The Treasury sold mortgage-backed securities at record high prices. 
A) It approached the European Central bank to purchase its debts at low rates. 
B) It engaged in target asset relief programs. 
C) It induced implosions in deficits through fiscal policies. 
D) The Treasury sold mortgage-backed securities at record high prices.

Question 8

The Germans and the French were compelled to keep Greece in the euro because

Accepted Answer

A) they feared that the Greek exit would lead to a collapse of the entire euro system. 
B) they had invested a large amount in the form of bailout packages to Greece. 
C) they relied heavily on Greece for trade and feared that they would lose their trading partner. 
D) they feared that their home currencies would be devalued if Greece opted out of euro. 
A) they feared that the Greek exit would lead to a collapse of the entire euro system. 
B) they had invested a large amount in the form of bailout packages to Greece. 
C) they relied heavily on Greece for trade and feared that they would lose their trading partner. 
D) they feared that their home currencies would be devalued if Greece opted out of euro.

Question 9

Which of the following is one of the main causes of economic crises in Ireland and Spain?

Accepted Answer

A) The bursting of the housing bubble 
B) High debt to GDP ratios 
C) High long-term interest rates 
D) Population explosion 
A) The bursting of the housing bubble 
B) High debt to GDP ratios 
C) High long-term interest rates 
D) Population explosion

Question 10

Which of the following is an unintended consequence of austerity policies?

Accepted Answer

A) Hyperinflation 
B) Large budget deficits 
C) Reduction in taxes 
D) Reduction in unemployment 
A) Hyperinflation 
B) Large budget deficits 
C) Reduction in taxes 
D) Reduction in unemployment

Question 11

Which of the following treaties led to the creation of the common European currency, the euro?

Accepted Answer

A) The Merger Treaty 
B) The Maastricht Treaty 
C) The Treaty of Westminster 
D) The Treaty of Commerce and Navigation 
A) The Merger Treaty 
B) The Maastricht Treaty 
C) The Treaty of Westminster 
D) The Treaty of Commerce and Navigation

Question 12

In which year did GDP growth in the United States fall below -2 percent?

Accepted Answer

A) 2001 
B) 2003 
C) 2007 
D) 2009 
A) 2001 
B) 2003 
C) 2007 
D) 2009

Question 13

The government of Auspicia increases taxes and cuts spending during a recession. Which of the following is likely to happen in in Auspicia according to the Keynesians?

Accepted Answer

A) Decrease in economic activity 
B) Increase in investment 
C) Increase in consumption 
D) Reduction in unemployment 
A) Decrease in economic activity 
B) Increase in investment 
C) Increase in consumption 
D) Reduction in unemployment

Question 14

Relative to the first quarter of 2000, housing prices _____ in Ireland between 2000 and 2009.

Accepted Answer

A) doubled 
B) tripled 
C) increased by 150 percent 
D) decreased by 100 percent 
A) doubled 
B) tripled 
C) increased by 150 percent 
D) decreased by 100 percent

Question 15

If Appleland decides to adopt austerity policies, it will

Accepted Answer

A) increase spending and taxes 
B) decrease spending and taxes 
C) increase spending and cut taxes 
D) decrease spending and increase taxes 
A) increase spending and taxes 
B) decrease spending and taxes 
C) increase spending and cut taxes 
D) decrease spending and increase taxes

Question 16

Which of the following was true of countries willing to join the euro?

Accepted Answer

A) The countries had to give up the ability to use monetary policy as individual countries. 
B) The countries had to maintain a debt to GDP ratio of more than 60 percent. 
C) The countries had to lose the eligibility to participate in foreign trade. 
D) The countries had to maintain bank balances in their home currencies. 
A) The countries had to give up the ability to use monetary policy as individual countries. 
B) The countries had to maintain a debt to GDP ratio of more than 60 percent. 
C) The countries had to lose the eligibility to participate in foreign trade. 
D) The countries had to maintain bank balances in their home currencies.

Question 17

From the Keynesian point of view, Appleland's austerity policy

Accepted Answer

A) does not cause any change in its real GDP. 
B) decrease its real GDP to RGDP'. 
C) increase its price level to P''. 
D) does not cause any change in its price level. 
A) does not cause any change in its real GDP. 
B) decrease its real GDP to RGDP'. 
C) increase its price level to P''. 
D) does not cause any change in its price level.

Question 18

To counter the negative effects of the Great Recession, the U.S.

Accepted Answer

A) increased the long-term interest rate to 8 percent. 
B) reduced the inflation rate to zero. 
C) induced explosions in deficits through fiscal policies. 
D) induced implosions in deficits through fiscal policies. 
A) increased the long-term interest rate to 8 percent. 
B) reduced the inflation rate to zero. 
C) induced explosions in deficits through fiscal policies. 
D) induced implosions in deficits through fiscal policies.

Question 19

_____ were the main sources of mortgage loans in the United States between 2000 and 2009?

Accepted Answer

A) Covered bonds 
B) Mortgage-backed securities 
C) Loans from credit unions 
D) Credit card receivables 
A) Covered bonds 
B) Mortgage-backed securities 
C) Loans from credit unions 
D) Credit card receivables

Question 20

Which of the following countries offered bailouts for the weaker economies in the European Union during the economic downturn?

Accepted Answer

A) Italy and Germany 
B) Germany and France 
C) France and Spain 
D) Spain and Greece 
A) Italy and Germany 
B) Germany and France 
C) France and Spain 
D) Spain and Greece

Exam 19: The European Debt Crisis

Which of the following is true of a covered bond?

The government of Imbrusia introduces new taxes and cuts spending to mitigate recession. Which of the following is likely to happen in Imbrusia according to the Keynesians?

Which of the following is one of the main causes of the fiscal crisis in Greece?

The European Economic Community was set up to _____.

In which year did the unemployment rate in Germany fall compared to the EU-27 average?

The per capita GDP in Italy declined steadily between 2000 and 2010. One of the main causes of this crisis is that

Which of the following policies did the United States undertake to mitigate the Great Recession?

The Germans and the French were compelled to keep Greece in the euro because

Which of the following is one of the main causes of economic crises in Ireland and Spain?

Which of the following is an unintended consequence of austerity policies?

Which of the following treaties led to the creation of the common European currency, the euro?

In which year did GDP growth in the United States fall below -2 percent?

The government of Auspicia increases taxes and cuts spending during a recession. Which of the following is likely to happen in in Auspicia according to the Keynesians?

Relative to the first quarter of 2000, housing prices _____ in Ireland between 2000 and 2009.

If Appleland decides to adopt austerity policies, it will

Which of the following was true of countries willing to join the euro?

From the Keynesian point of view, Appleland's austerity policy

To counter the negative effects of the Great Recession, the U.S.

_____ were the main sources of mortgage loans in the United States between 2000 and 2009?

Which of the following countries offered bailouts for the weaker economies in the European Union during the economic downturn?

Economics: the Study of Opportunity Cost

Supply and Demand

The Concept of Elasticity and Consumer and Producer Surplus

Firm Production, Cost, and Revenue

Perfect Competition, Monopoly, and Economic Versus Normal Profit

Every Macroeconomic Word You Ever Heard: Gross Domestic Product, Inflation, Unemployment, Recession, Depression

Interest Rates and Present Value

Aggregate Demand and Aggregate Supply

Fiscal Policy

Monetary Policy

Federal Spending

Federal Deficits, Surpluses, and the National Debt

The Housing Bubble

The Recession of 2007-2009: Causes and Policy Responses

Is Economic Stagnation the New Normal

Is the Fiscalsky Falling: An Examination of Unfunded Social Security, Medicare, and State and Local Pension Liabilities

International Trade: Does It Jeopardize American Jobs

International Finance and Exchange Rates

Economic Growth and Development

Nafta, Gatt, Wto: Are Trade Agreements Good for Us

The Line Between Legal and Illegal Goods

Natural Resources, the Environment, and Climate Change

Health Care

Government-Provided Health Insurance: Medicaid, Medicare, and the Child Health Insurance Program

The Economics of Prescription Drugs

So You Want to Be a Lawyer: Economics and the Law

The Economics of Crime

Antitrust

The Economics of Race and Discrimination

Income and Wealth Inequality

Farm Policy

Minimum Wage

Ticket Brokers and Ticket Scalping

Rent Control

Economics of K-12 Education

Economics of College and University Education

Poverty and Welfare

Head Start

Social Security

Personal Income Taxes

Energy Prices

If We Build It, Will They Come and Other Sports Questions

The Stock Market Crashes

Unions

Walmart: Always Low Prices and Low Wages- Always

The Economic Impact of Casino Gambling

The Economics of Terrorism

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