Question 1

Unemployment and welfare benefits are examples of transfer payments for which no current productive services are given in return.

Accepted Answer

A) True 
 B)False

Question 2

Automatic stabilizers include all of the following except:

Accepted Answer

A) unemployment insurance 
B) social security 
C) welfare 
D) pay-as-you-go tax system 
A) unemployment insurance 
B) social security 
C) welfare 
D) pay-as-you-go tax system

Question 3

Total reserves in the banking system consist of:

Accepted Answer

A) vault cash held at commercial banks and other depository institutions 
B) reserve deposits held at Federal Reserve banks 
C) currency in circulation 
D) both a and b 
A) vault cash held at commercial banks and other depository institutions 
B) reserve deposits held at Federal Reserve banks 
C) currency in circulation 
D) both a and b

Question 4

The output of goods and services in an economy is referred to as the gross domestic product.

Accepted Answer

A) True 
 B)False

Question 5

When the United States Treasury makes a payment to an individual or business, it usually takes the form of a:

Accepted Answer

A) check drawn on a Federal Reserve Bank 
B) check drawn directly against the U.S.Treasury 
C) special Treasury voucher 
D) check drawn against a bank in which tax balances are held 
A) check drawn on a Federal Reserve Bank 
B) check drawn directly against the U.S.Treasury 
C) special Treasury voucher 
D) check drawn against a bank in which tax balances are held

Question 6

In our financial system, the money multiplier:

Accepted Answer

A) is not affected by the Federal Reserve 
B) can fluctuate over time 
C) is not affected by the nonbank public 
D) is not affected by the U.S.Treasury 
A) is not affected by the Federal Reserve 
B) can fluctuate over time 
C) is not affected by the nonbank public 
D) is not affected by the U.S.Treasury

Question 7

The government body primarily responsible for monetary policy is Congress.

Accepted Answer

A) True 
 B)False

Question 8

The branch of government primarily responsible for the formulation of fiscal policy is the President and his Council of Economic Advisors.

Accepted Answer

A) True 
 B)False

Question 9

Banking system reserves plus currency held by the nonbank public is referred to as the:

Accepted Answer

A) money supply 
B) monetary base 
C) monetary multiplier 
D) monetary requirement 
A) money supply 
B) monetary base 
C) monetary multiplier 
D) monetary requirement

Question 10

The U.S.government may influence monetary and credit conditions indirectly through taxation and expenditure programs.

Accepted Answer

A) True 
 B)False

Question 11

The President of the United States formulates budgetary and fiscal policy, but Congress must enact legislation to implement these policies.

Accepted Answer

A) True 
 B)False

Question 12

If the reserve requirement is 25% and $5,000 is injected into the banking system, the maximum expansion in the money supply would be:

Accepted Answer

A) $1,250 
B) $20,000 
C) $6,667 
D) none of the above 
A) $1,250 
B) $20,000 
C) $6,667 
D) none of the above

Question 13

If the Fed wishes to stimulate the economy, it may:

Accepted Answer

A) lower the discount rate 
B) raise reserve requirements 
C) sell securities through open market operations 
D) raise both the discount rate and the reserve requirements 
A) lower the discount rate 
B) raise reserve requirements 
C) sell securities through open market operations 
D) raise both the discount rate and the reserve requirements

Question 14

High inflation has been a significant problem in the United States during the past decade.

Accepted Answer

A) True 
 B)False

Question 15

The United States economy has little influence on the economies of other nations.

Accepted Answer

A) True 
 B)False

Question 16

Total bank reserves do not include which of the following?

Accepted Answer

A) deficit reserves 
B) excess reserves 
C) required reserves 
D) all the above are included in total bank reserves 
A) deficit reserves 
B) excess reserves 
C) required reserves 
D) all the above are included in total bank reserves

Question 17

The primary types of policy decisions used by policy makers to achieve economic objectives include trade policy, exchange rate policy, and regulatory decisions.
Too general

Accepted Answer

A) True 
 B)False

Question 18

During the 2007 - 2009 financial crisis, ___________ and __________, who were major participants in the secondary mortgage markets, were on the verge of financial insolvency and possible collapse in mid-2008.

Accepted Answer

A) Fannie Mae and Freddie Mac 
B) the Federal Treasury and the Federal Reserve 
C) Morgan Stanley and Smith Barney 
D) Washington Mutual and Lehman Brothers 
E) none of the above 
A) Fannie Mae and Freddie Mac 
B) the Federal Treasury and the Federal Reserve 
C) Morgan Stanley and Smith Barney 
D) Washington Mutual and Lehman Brothers 
E) none of the above

Question 19

In an effort to stimulate economic activity, Congress and the president passed the $787 billion _________________________________ in February, 2009 with the funds to be used to provide tax relief, appropriations, and direct spending.

Accepted Answer

A) American Reconstruction and Reconfiguration Act of 2009 
B) American Real Estate and Reconstruction Act of 2009 
C) American Real Estate Reinvestment Act of 2009 
D) American Reconstruction and Real Estate Act of 2009 
E) none of the above 
A) American Reconstruction and Reconfiguration Act of 2009 
B) American Real Estate and Reconstruction Act of 2009 
C) American Real Estate Reinvestment Act of 2009 
D) American Reconstruction and Real Estate Act of 2009 
E) none of the above

Question 20

During the 2007 - 2009 financial crisis, ___________ and __________, who were major participants in the secondary mortgage markets, were on the verge of financial insolvency and possible collapse in mid-2008.

Accepted Answer

A) Freddie Mae and Fannie Mac 
B) the Federal Treasury and the Federal Reserve 
C) Morgan Stanley and Smith Barney 
D) Washington Mutual and Lehman Brothers 
E) none of the above 
A) Freddie Mae and Fannie Mac 
B) the Federal Treasury and the Federal Reserve 
C) Morgan Stanley and Smith Barney 
D) Washington Mutual and Lehman Brothers 
E) none of the above

Unemployment and welfare benefits are examples of transfer payments for which no current productive services are given in return.

Automatic stabilizers include all of the following except:

Total reserves in the banking system consist of:

The output of goods and services in an economy is referred to as the gross domestic product.

When the United States Treasury makes a payment to an individual or business, it usually takes the form of a:

In our financial system, the money multiplier:

The government body primarily responsible for monetary policy is Congress.

The branch of government primarily responsible for the formulation of fiscal policy is the President and his Council of Economic Advisors.

Banking system reserves plus currency held by the nonbank public is referred to as the:

The U.S.government may influence monetary and credit conditions indirectly through taxation and expenditure programs.

The President of the United States formulates budgetary and fiscal policy, but Congress must enact legislation to implement these policies.

If the reserve requirement is 25% and $5,000 is injected into the banking system, the maximum expansion in the money supply would be:

If the Fed wishes to stimulate the economy, it may:

High inflation has been a significant problem in the United States during the past decade.

The United States economy has little influence on the economies of other nations.

Total bank reserves do not include which of the following?

The primary types of policy decisions used by policy makers to achieve economic objectives include trade policy, exchange rate policy, and regulatory decisions. Too general

During the 2007 - 2009 financial crisis, _ and , who were major participants in the secondary mortgage markets, were on the verge of financial insolvency and possible collapse in mid-2008.

In an effort to stimulate economic activity, Congress and the president passed the $787 billion _________________________________ in February, 2009 with the funds to be used to provide tax relief, appropriations, and direct spending.

During the 2007 - 2009 financial crisis, _ and , who were major participants in the secondary mortgage markets, were on the verge of financial insolvency and possible collapse in mid-2008.

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuation

Securities Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters

Exam 5: Policy Makers and the Money Supply

Unemployment and welfare benefits are examples of transfer payments for which no current productive services are given in return.

Automatic stabilizers include all of the following except:

Total reserves in the banking system consist of:

The output of goods and services in an economy is referred to as the gross domestic product.

When the United States Treasury makes a payment to an individual or business, it usually takes the form of a:

In our financial system, the money multiplier:

The government body primarily responsible for monetary policy is Congress.

The branch of government primarily responsible for the formulation of fiscal policy is the President and his Council of Economic Advisors.

Banking system reserves plus currency held by the nonbank public is referred to as the:

The U.S.government may influence monetary and credit conditions indirectly through taxation and expenditure programs.

The President of the United States formulates budgetary and fiscal policy, but Congress must enact legislation to implement these policies.

If the reserve requirement is 25% and $5,000 is injected into the banking system, the maximum expansion in the money supply would be:

If the Fed wishes to stimulate the economy, it may:

High inflation has been a significant problem in the United States during the past decade.

The United States economy has little influence on the economies of other nations.

Total bank reserves do not include which of the following?

The primary types of policy decisions used by policy makers to achieve economic objectives include trade policy, exchange rate policy, and regulatory decisions. Too general

During the 2007 - 2009 financial crisis, ___________ and __________, who were major participants in the secondary mortgage markets, were on the verge of financial insolvency and possible collapse in mid-2008.

In an effort to stimulate economic activity, Congress and the president passed the $787 billion _________________________________ in February, 2009 with the funds to be used to provide tax relief, appropriations, and direct spending.

During the 2007 - 2009 financial crisis, ___________ and __________, who were major participants in the secondary mortgage markets, were on the verge of financial insolvency and possible collapse in mid-2008.

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuation

Securities Markets

Financial Return and Risk Concepts

Business Organization and Financial Data

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters

During the 2007 - 2009 financial crisis, _ and , who were major participants in the secondary mortgage markets, were on the verge of financial insolvency and possible collapse in mid-2008.

During the 2007 - 2009 financial crisis, _ and , who were major participants in the secondary mortgage markets, were on the verge of financial insolvency and possible collapse in mid-2008.