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[answered] 1. When the government has a budget deficit or surplus, it


i need answers by tomorrow morning plssWhen the government has a budget deficit or surplus, it enters the __________.

A. market for loanable funds

B. subprime housing market

C. bond market

D. government-sponsored mortgage lenders market

Which of the following is NOT a key financial institution?

A. insurance companies

B. stock markets

C. commercial banks

D. government-sponsored mortgage lenders

Nations with low levels of GDP per capita may converge to richer nations if __________.

A. nations with high levels of income experience a continuously increasing growth rate

B. nations with lower levels of income grow more quickly than those with higher levels of income

C. nations with lower levels of income spend less on investment

D. nations with lower levels of income grow more slowly than those with higher levels of income

if government increases spending and wants to maintain a balanced budget, it should __________.

A. decrease taxes by an equal amount

B. increase taxes by an equal amount

C. decrease taxes by an amount equal to the increase in spending multiplied by the tax multiplier

D. increase taxes by an amount equal to the increase in spending multiplied by the tax multiplier

The fraction of additional income spent on imports is called the __________.

A. import function

B. marginal propensity to import

C. marginal propensity to export

D. trade balance

Higher real interest rates resulting from a government budget deficit will __________ the amount of loanable funds a firm demands for their investments.

A. stabilize

B. decrease

C. not affect

D. increase

Increases in the stock of capital are the result of decreases in __________.

A. gross investment

B. depreciation

C. net investment

D. all of the above

Suppose that for a given firm, the increase in output resulting from the last worker hired is less than the increase in output of the previous worker hired. This is an example of __________.

A. diminishing returns

B. constant returns

C. increasing return

D. capital deepenin

In developing countries, the highest returns are from investing in __________.

A. transportation systems

B. sanitation systems

C. education

D. defense

Economic growth is severely impeded in economies __________.

A. with a lack of clear property rights

B. with a strong market system

C. with high rates of convergence

D. which encourage induced innovati

According to the text, __________ is perhaps the most critical aspect of a country's economic performance.

A. growth in GDP

B. the inflation rate

C. the unemployment rate

D. the living standard

The supply of money in the U.S. economy is determined primarily by __________.

A. decisions made by the Federal Reserve and the U.S. Treasury

B. the actions of the Federal Reserve and the banking system

C. consumers and the banking system

D. the demand for money in the econom

When money is used to express the value of goods and services, it is functioning as a __________.

A. medium of exchange

B. store of value

C. unit of account

D. store of purchasing powe

An open market __________ by the Fed increases the money supply, which leads to __________ interest rates and increased GDP.

A. purchase; increased

B. purchase; decreased

C. sale; increased

D. sale; decreased

The Federal Reserve System was created by the __________.

A. U.S. Treasury

B. President

C. Congress

D. Supreme Court

An open market __________ by the Fed decreases the money supply, which leads to __________ interest rates and a fall in investment spending.

A. sale; increased

B. sale; decreased

C. purchase; increased

D. purchase; decreased

Which of the following serves as the central bank for the United States?

A. the Federal Reserve System

B. the Treasury Department

C. the Federal Deposit Insurance Corporation

D. the Congress

if money is used as a mechanism to hold purchasing power for a period of time, it is functioning as a __________.

A. standard of value

B. store of value

C. medium of exchange

D. unit of account

An increase in the reserve requirement __________.

A. increases the money supply, which leads to increased interest rates and a decrease in GDP

B. increases the money supply, which leads to decreased interest rates and a decrease in GDP

C. decreases the money supply, which leads to increased interest rates and a decrease in GDP

D. decreases the money supply, which leads to decreased interest rates and a decrease in GDP

The Fed can change the money supply by buying or selling long-term Treasury bonds. Purchasing long-term securities is commonly called __________.

A. open market operations

B. discount operations

C. federal funds speculation

D. quantitative easing

While some tokens, such as a metro fair card or plane ticket, are only acceptable forms of payment in a specific arena, money is __________, meaning it can be used to purchase anything.

A. a government note

B. generally accepted

C. purchase specific

D. a representation of currency

A bank's reserves __________.

A. are the sum of its excess and required reserves

B. can be held as cash in its vault

C. can be held as deposits with the Federal Reserve

D. all of the above

What impact does the Fed's raising the interest rate have on the money supply and on the price level?

A. An increase in interest rates raises the money supply and eventually reduces prices.

B. An increase in interest rates reduces the money demand which will slow the growth in prices.

C. An increase in interest rates lowers the money supply and raises the money demand, which will neutralize price increases.

D. An increase in interest rates will increase investment spending and GDP, which will lower prices.

In the __________ , increases in the supply of money will __________.

A. short run; raise total demand and output

B. long run; raise total demand and output

C. long run; lead to lower prices

D. short run; decrease total demand and output

Based on the model of the money market, if prices in the economy decrease, the equilibrium interest rate should __________.

A. stay the same

B. increase

C. decrease

D. increase to the same extent that the supply of money increases

By law, banks are required to __________.

A. hold 100 percent of customer deposits as reserves

B. hold a fraction of their reserves at the Federal Reserve bank

C. hold a fraction of demand deposits as reserves

D. lend out no more than the amount of their required reserves

Consider how the value of the U.S. dollar affects the worldwide increase in commodity prices to answer the following two question(s.. Starting in the summer of 2010, there was a rise in prices of commodities such as oil and food worldwide. Some economists suggested that monetary policy in the United States was the cause of the worldwide commodity boom. According to this scenario, some economists noticed that the U.S. dollar __________ largely because monetary policy in the United States had driven interest rates __________.

A. depreciated; down

B. depreciated; up

C. appreciated; down

D. appreciated; up

M1 __________.

A. is the sum of currency plus traveler's checks

B. is the narrowest definition of the money supply

C. includes small time deposits

D. includes credit cards


1. When the government has a budget deficit or surplus, it enters the __________. A. market for loanable funds

 

B. subprime housing market

 

C. bond market

 

D. government-sponsored mortgage lenders market

 

Which of the following is NOT a key financial institution? A. insurance companies

 

B. stock markets

 

C. commercial banks

 

D. government-sponsored mortgage lenders

 

Nations with low levels of GDP per capita may converge to richer nations if __________. A. nations with high levels of income experience a continuously increasing growth rate

 

B. nations with lower levels of income grow more quickly than those with higher levels of

 

income

 

C. nations with lower levels of income spend less on investment

 

D. nations with lower levels of income grow more slowly than those with higher levels of

 

income

 

if government increases spending and wants to maintain a balanced budget, it should __________. A. decrease taxes by an equal amount

 

B. increase taxes by an equal amount

 

C. decrease taxes by an amount equal to the increase in spending multiplied by the tax

 

multiplier

 

D. increase taxes by an amount equal to the increase in spending multiplied by the tax

 

multiplier The fraction of additional income spent on imports is called the __________. A. import function

 

B. marginal propensity to import

 

C. marginal propensity to export

 

D. trade balance

 

Higher real interest rates resulting from a government budget deficit will

 

__________ the amount of loanable funds a firm demands for their

 

investments.

 

A. stabilize

 

B. decrease

 

C. not affect

 

D. increase

 

Increases in the stock of capital are the result of decreases in __________.

 

A. gross investment

 

B. depreciation

 

C. net investment

 

D. all of the above

 

Suppose that for a given firm, the increase in output resulting from the

 

last worker hired is less than the increase in output of the previous worker

 

hired. This is an example of __________.

 

A. diminishing returns

 

B. constant returns

 

C. increasing return

 

D. capital deepenin

 

In developing countries, the highest returns are from investing in

 

__________.

 

A. transportation systems

 

B. sanitation systems

 

C. education

 

D. defense

 

Economic growth is severely impeded in economies __________.

 

A. with a lack of clear property rights B. with a strong market system

 

C. with high rates of convergence

 

D. which encourage induced innovati

 

According to the text, __________ is perhaps the most critical aspect of a

 

country's economic performance.

 

A. growth in GDP

 

B. the inflation rate

 

C. the unemployment rate

 

D. the living standard

 

The supply of money in the U.S. economy is determined primarily by

 

__________.

 

A. decisions made by the Federal Reserve and the U.S.

 

Treasury

 

B. the actions of the Federal Reserve and the banking

 

system

 

C. consumers and the banking system

 

D. the demand for money in the econom

 

When money is used to express the value of goods and services, it is

 

functioning as a __________.

 

A. medium of exchange

 

B. store of value

 

C. unit of account

 

D. store of purchasing powe

 

An open market __________ by the Fed increases the money supply, which

 

leads to __________ interest rates and increased GDP.

 

A. purchase; increased

 

B. purchase; decreased

 

C. sale; increased

 

D. sale; decreased

 

The Federal Reserve System was created by the __________.

 

A. U.S. Treasury B. President

 

C. Congress

 

D. Supreme Court

 

An open market __________ by the Fed decreases the money supply, which

 

leads to __________ interest rates and a fall in investment spending.

 

A. sale; increased

 

B. sale; decreased

 

C. purchase; increased

 

D. purchase; decreased

 

Which of the following serves as the central bank for the United States?

 

A. the Federal Reserve System

 

B. the Treasury Department

 

C. the Federal Deposit Insurance Corporation

 

D. the Congress

 

if money is used as a mechanism to hold purchasing power for a period of

 

time, it is functioning as a __________.

 

A. standard of value

 

B. store of value

 

C. medium of exchange

 

D. unit of account

 

An increase in the reserve requirement __________.

 

A. increases the money supply, which leads to increased

 

interest rates and a decrease in GDP

 

B. increases the money supply, which leads to decreased

 

interest rates and a decrease in GDP

 

C. decreases the money supply, which leads to increased

 

interest rates and a decrease in GDP

 

D. decreases the money supply, which leads to

 

decreased interest rates and a decrease in GDP

 

The Fed can change the money supply by buying or selling long-term

 

Treasury bonds. Purchasing long-term securities is commonly called

 

__________. A. open market operations

 

B. discount operations

 

C. federal funds speculation

 

D. quantitative easing

 

While some tokens, such as a metro fair card or plane ticket, are only

 

acceptable forms of payment in a specific arena, money is __________,

 

meaning it can be used to purchase anything.

 

A. a government note

 

B. generally accepted

 

C. purchase specific

 

D. a representation of currency

 

A bank's reserves __________.

 

A. are the sum of its excess and required reserves

 

B. can be held as cash in its vault

 

C. can be held as deposits with the Federal Reserve

 

D. all of the above

 

What impact does the Fed's raising the interest rate have on the money

 

supply and on the price level?

 

A. An increase in interest rates raises the money supply

 

and eventually reduces prices.

 

B. An increase in interest rates reduces the money

 

demand which will slow the growth in prices.

 

C. An increase in interest rates lowers the money supply

 

and raises the money demand, which will neutralize price

 

increases.

 

D. An increase in interest rates will increase investment

 

spending and GDP, which will lower prices.

 

In the __________ , increases in the supply of money will __________.

 

A. short run; raise total demand and output

 

B. long run; raise total demand and output

 

C. long run; lead to lower prices

 

D. short run; decrease total demand and output Based on the model of the money market, if prices in the economy

 

decrease, the equilibrium interest rate should __________.

 

A. stay the same

 

B. increase

 

C. decrease

 

D. increase to the same extent that the supply of money

 

increases

 

By law, banks are required to __________.

 

A. hold 100 percent of customer deposits as reserves

 

B. hold a fraction of their reserves at the Federal Reserve

 

bank

 

C. hold a fraction of demand deposits as reserves

 

D. lend out no more than the amount of their required

 

reserves

 

Consider how the value of the U.S. dollar affects the worldwide increase in

 

commodity prices to answer the following two question(s.. Starting in the

 

summer of 2010, there was a rise in prices of commodities such as oil and

 

food worldwide. Some economists suggested that monetary policy in the

 

United States was the cause of the worldwide commodity boom.

 

According to this scenario, some economists noticed that the U.S. dollar

 

__________ largely because monetary policy in the United States had

 

driven interest rates __________.

 

A. depreciated; down

 

B. depreciated; up

 

C. appreciated; down

 

D. appreciated; up

 

M1 __________.

 

A. is the sum of currency plus traveler's checks

 

B. is the narrowest definition of the money supply

 

C. includes small time deposits

 

D. includes credit cards

 


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