POST ECO202 FINAL EXAM 100 % CORRECT GUARANTEED ANSWER

• Question
1
2 out of 2 points

In 2008 the U.S. budget deficit
increased. According to the open-economy macroeconomic model

the interest rate and the real exchange rate should have risen.
the
interest rate and the real exchange rate should have fallen.

the
interest rate should have fallen and the real exchange rate should have
risen.

the
interest rate should have risen and the real exchange rate should have
fallen.

• Question
2
2 out of 2 points

An increase in the interest rate
increases the opportunity cost of holding money, so the quantity of money
demanded falls.

True
False

• Question
3
2 out of 2 points

Under the assumptions of quantity
theory, if the money supply increases by 3 percentage points which of the
following increases by 3 percentage points?

the price level but not real GDP

neither
real GDP nor the price level

real
GDP but not the price level
real
GDP and the price level

• Question
4
2 out of 2 points

During the financial crisis and
recession of 2008-2009

unemployment
and inflation were low
unemployment
and inflation were high
unemployment
was low and inflation was high

unemployment was high and inflation was low

• Question
5
2 out of 2 points

If the short-run aggregate supply
curve were to shift left, prices and output would fall.

True
False

• Question
6
2 out of 2 points

If consumers and businesses
became more pessimistic about the future of the economy, the government could
try to stabilize output by

decreasing
government expenditures. The primary objection to this is that an increase in
government expenditures has no impact on the economy.
decreasing
government expenditures. The primary objection to this is that there are lags
in implementing fiscal policy.
increasing
government expenditures. The primary objection to this is that an increase in
government expenditures has no impact on the economy.

increasing government expenditures. The primary objection to
this is that there are lags in implementing fiscal policy.

• Question
7
2 out of 2 points

The long-run Phillips curve
implies that monetary policy influences nominal but not real variables.

True
False

• Question
8
2 out of 2 points

When the Fed announces a target
for the federal funds rate it essentially accommodates the day-to-day shifts in
money demand by adjusting the money supply accordingly.

True
False

• Question
9
2 out of 2 points

According to rational
expectations if the government made a credible commitment to a policy of low
inflation, people would be rational enough to lower their expectations of
inflation immediately. The short run Phillips curve would shift downward and
the economy would reach low inflation quickly.

True
False

• Question
10
2 out of 2 points

During recessions

unemployment
falls and a decline in consumption accounts for the majority of the decline in
output.
unemployment
rises and a decline in consumption accounts for the majority of the decline in
output.

unemployment rises and a decline in investment accounts for
the majority of the decline in output.

unemployment
falls and a decline in investment accounts for the majority of the decline in
output.

• Question
11
2 out of 2 points

If the U.S. put an import quota
on refrigerators, it would

raise U.S. net exports of refrigerators and raise net
exports of other U.S. goods.

lower
U.S. net exports of refrigerators and lower net exports of other U.S.
goods.

lower
U.S. net exports of refrigerators and raise net exports of other U.S.
goods.

raise U.S. net exports of refrigerators and lower net
exports of other U.S. goods.

• Question
12
2 out of 2 points

If the U.S. were to impose an
import quota on CD players

net
exports and the exchange rate would rise.

net
exports and the exchange rate would be unchanged.

net exports would be unchanged and the exchange rate would
rise.
net
exports would rise and the exchange rate would be unchanged.

• Question
13
2 out of 2 points

If aggregate demand shifts right
farther than expected, then

: inflation
is lower than expected and unemployment rises.

inflation is higher than expected and unemployment
falls.

inflation
is lower than expected and unemployment falls.

inflation
is higher than expected and unemployment rises.

• Question
14
2 out of 2 points

The demand curve for dollars in
the market for foreign-currency exchange is based on the logic that a decrease
in the exchange rate makes

domestic
goods more expensive relative to foreign goods so net exports rise.
purchasing
assets from abroad less attractive so net capital outflow rises.
purchasing
assets from abroad more attractive so net capital outflow rises.

domestic goods less expensive relative to foreign goods so
net exports rise.

• Question
15
2 out of 2 points

If Americans decided to save a
larger fraction of their income, the interest rate would fall and the dollar
would depreciate.

True
False

• Question
16
2 out of 2 points

An open economy can only finance
its investment purchases with domestic saving.

True
False

• Question
17
2 out of 2 points

National saving is the source of
the supply of loanable funds in the open-economy macroeconomic model.

True
False

• Question
18
2 out of 2 points

Other things the same, if the
U.S. dollar appreciates, then U.S. goods become

cheaper
relative to foreign goods, so U.S. net exports decrease.

more
expensive relative to foreign goods, so U.S. net exports increase.

more expensive relative to foreign goods, so U.S. net
exports decrease.
cheaper
relative to foreign goods, so U.S. net exports increase.

• Question
19
2 out of 2 points

A mutual fund in China buys
$100,000 of bonds sold by a U.S. corporation. This is an example of

foreign portfolio investment. By itself it reduces U.S. net
capital outflow.
foreign
direct investment. By itself it raises U.S. net capital outflow.
foreign
portfolio investment. By itself it raises U.S. net capital outflow.

foreign
direct investment. By itself it reduces U.S. net capital outflow.

• Question
20
2 out of 2 points

Money that has value as a good is
called fiat money.

True
False

• Question
21
2 out of 2 points

Which of the following both
decrease the money supply?

banks want to hold a larger share of deposits as excess
reserves, households want to hold more currency relative to deposits
banks
want to hold a smaller share of deposits as excess reserves, households want to
hold less currency relative to deposits
banks
want to hold a smaller share of deposits as excess reserves, households want to
hold more currency relative to deposits
banks
want to hold a larger share of deposits as excess reserves, households want to
hold less currency relative to deposits

• Question
22
2 out of 2 points

According to the economist’s
definition, money includes only the few types of wealth that are regularly
accepted by sellers in exchange for goods and services.

True
False

• Question
23
2 out of 2 points

Which of the following best
illustrates money’s use as a unit of account?

Susan
deposits money in her checking account so she can make purchases in the
future.

Loan repayments are given in terms of dollars.
Ann
liquidates stocks.
Robert
uses dollars to buy tickets for a concert.

• Question
24
2 out of 2 points

Net capital outflow equals net
exports.

True
False

• Question
25
2 out of 2 points

At a price level below
equilibrium people want to hold

less money than the Fed has created, so spending would rise.

less
money than the Fed has created, so spending would fall.

more
money than the Fed has created, so spending would fall.
more
money than the Fed has created, so spending would rise.

• Question
26
2 out of 2 points

If some firms have sticky prices,
and the price level raises more than had been anticipated, then in the short
run those firms with sticky prices will have

an increase in customers and so increase production.

a
decrease in customers and so reduce production.

a
decrease in customers but will not change production.
an
increase in customers but will not change production.

• Question
27
2 out of 2 points

If the government of a foreign
country chooses to purchase large quantities of U.S. assets, which of the
following happens?

the
U.S. interest rate rises and the dollar appreciates
the
U.S. interest rate falls and the dollar depreciates

the U.S. interest rate falls and the dollar appreciates

the
U.S. interest rate rises and the dollar depreciates

• Question
28
2 out of 2 points

In the market for foreign
currency-exchange an increase in the demand for dollars would cause the real
exchange rate to fall.

True
False

• Question
29
0 out of 2 points

Other things the same, an
increase in the price level shifts money demand

left
which raises the interest rate.
left
which lowers the interest rate.

right which raises the interest rate.
right
which lowers the interest rate.

• Question
30
2 out of 2 points

Which of the following Fed
actions both increase the money supply?

increasing
reserve requirements, decreasing the interest rate it pays on reserves
increasing
reserve requirements, increasing the interest rate it pays on reserves

decreasing reserve requirements, decreasing the interest
rate it pays on reserves
decreasing
reserve requirements, increasing the interest rate it pays on reserves

• Question
31
2 out of 2 points

Which of the following decreases
the natural rate of unemployment?

a decrease in the minimum wage but not an increase in the
money supply growth rate
neither
an increase in the money supply growth rate nor a decrease in the minimum
wage
a
decrease in the minimum wage and an increase in the money supply growth
rate
an
increase in the money supply growth rate but not a decrease in the minimum
wage

• Question
32
2 out of 2 points

Nearly all hyperinflations follow
the same pattern: high government spending is financed by increases in the
money supply.

True
False

• Question
33
2 out of 2 points

Purchasing-power parity means
that the prices of goods in terms of local currencies must be the same across
countries.

True
False

• Question
34
2 out of 2 points

Net capital outflow is determined
by

the interest
rate and the exchange rate. It is the source of the supply of dollars in the
market for foreign-currency exchange.
the
interest rate and the exchange rate. It is the source of the demand for dollars
in the market for foreign-currency exchange.

the interest rate but not the exchange rate. It is the
source of the supply of dollars in the market for foreign-currency
exchange.
the
interest rate but not the exchange rate. It is the source of the demand for
dollars in the market for foreign-currency exchange.

• Question
35
2 out of 2 points

As inflation rises, people choose
to hold less money. The resources used to reduce money holdings are called shoe
leather costs.

True
False

• Question
36
2 out of 2 points

Classical theory points to money
supply growth as the primary determinant of

both
unemployment and inflation.
neither
inflation nor unemployment.
unemployment
but not inflation.

inflation but not unemployment.

• Question
37
2 out of 2 points

A U.S. retail store uses dollars
to purchase Yuan (Chinese currency) it then uses all of these Yuan to buy toys
from a Chinese firm. Overall these transactions have

increased
U.S. net exports and decreased U.S. net capital outflow.

decreased
U.S. net exports and increased U.S. net capital outflow.

increased
U.S. net exports and increased U.S. net capital outflow.

decreased U.S. net exports and decreased U.S. net capital
outflow.

• Question
38
2 out of 2 points

According to Friedman and Phelps
it is appropriate to view the Phillips curve as a menu of options available to
policymakers.

True
False

• Question
39
2 out of 2 points

If firms and businesses became
more optimistic about the future, what would happen to prices and output in the
short run?

prices
would fall and output would rise

prices and output would rise

prices
would rise and output would fall
prices
and output would fall

• Question
40
2 out of 2 points

In the United States during the
1970’s, expected inflation rose substantially. This rise was due entirely to a
supply shock not to higher money supply growth.

True
False

• Question
41
2 out of 2 points

Other things the same, an
increase in the money supply cause the interest rate to rise to balance money
supply and money demand.

True
False

• Question
42
2 out of 2 points

According to the long-run
Phillips curve what are the long-run effects of an increase in the money supply
growth rate?

higher
inflation and higher unemployment.

no
change in inflation or unemployment.

higher inflation and no change in unemployment.

higher
inflation and lower unemployment

• Question
43
2 out of 2 points

If the U.S. inflation rate is
positive and higher than the inflation rate in Australia over the next few
years then

the U.S. dollar will buy fewer goods in the U.S. and buy
fewer Australian dollars in the market for foreign currency exchange.
the
U.S. dollar will buy fewer goods in the U.S. but buy more Australian dollars in
the market for foreign currency exchange.

the
U.S. dollar will buy more goods in the U.S. and buy more Australian dollars in
the market for foreign currency exchange.

the
U.S. dollar will buy more goods in the U.S. but buy fewer Australian dollars in
the market for foreign currency exchange.

• Question
44
2 out of 2 points

Short-run fluctuations in output
and the price level should be viewed as deviations from the continuing long-run
trends of output growth and inflation.

True
False

• Question
45
2 out of 2 points

Suppose the price of the product
you sell stays the same, but the prices of other goods and services rise, this
means that the

nominal
value of your product rose.
nominal
value of your product fell.

real value of your product fell.
real
value of your product rose.

• Question
46
2 out of 2 points

How many members of the Board of
Governors are voting member of the FOMC?

:
seven
twelve
four
five

• Question
47
2 out of 2 points

The recession of 2008-2009 was
associated with a decrease in aggregate demand.

True
False

• Question
48
2 out of 2 points

The Fed’s primary tool to change
the money supply is open-market operations, the buying and selling of bonds.

True
False

• Question
49
2 out of 2 points

As the price level rises, the
value of money rises.

True
False

• Question
50
0 out of 2 points

Which of the following is
included in M2 but not M1?

other
checkable deposits
demand
deposits
traveler’s
checks

savings deposits