(TCO 5) An increase in expected future income will …..

(TCO 5) An increase in expected
future income will (Points : 4)
increase aggregate demand and aggregate supply.
decrease aggregate demand and aggregate supply.
increase aggregate supply.
increase aggregate demand.

Question 2.2. (TCO 5) The upward slope of the short-run aggregate supply curve
is based on the assumption that (Points : 4)
wages and other resource prices do not respond to price level changes.
wages and other resource prices do respond to price level changes.
prices of output do not respond to price level changes.
prices of inputs are flexible while prices of outputs are fixed.

Question 3.3. (TCO 5) If the price of crude oil decreases, then this event
would most likely (Points : 4)
decrease aggregate supply in the U.S.
increase aggregate supply in the U.S.
increase aggregate demand in the U.S.
decrease aggregate demand in the U.S.

Question 4.4. (TCO 5) Deflation refers to a situation where (Points : 4)
price level falls.
price level rises.
the rate of inflation falls.
the rate of inflation rises.

Question 5.5. (TCO 6) Dissaving occurs when (Points : 4)
income is greater than saving.
income is less than consumption.
saving is greater than consumption.
saving is greater than the interest rate.

Question 6.6. (TCO 7) The M1 money supply is composed of (Points : 4)
all coins and paper money held by the general public and the banks.
bank deposits of households and business firms.
bank deposits and mutual funds.
checkable deposits and currency in circulation.

Question 7.7. (TCO 7) The basic requirement of money is that it be (Points : 4)
backed by precious metals–gold or silver.
authorized as legal tender by the central government.
generally accepted as a medium of exchange.
some form of debt or credit.

Question 8.8. (TCO 7) The Federal Reserve System consists of which of the
following? (Points : 4)
Federal Open Market Committee and Office of Thrift Supervision
Federal Deposit Insurance Corporation and Controller of the Currency
U.S. Treasury Department and Bureau of Engraving and Printing
Board of Governors and the 12 Federal Reserve Banks

Question 9.9. (TCO 7) Which group is responsible for the policy of changing the
money supply? (Points : 4)
Federal Open Market Committee
Office of Management and Budget
Thrift Advisory Council
Federal Advisory Council

Question 10.10. (TCO 7) The Federal funds rate is the rate that banks pay for
loans from (Points : 4)
the Fed.
the U.S. Treasury.
other banks.
large corporations.

Question 11.11. (TCO 7) The difference between Fed behavior during the Bank
Panics of 1930-1933 and the Financial Crisis of 2007-2008 is that the Fed
(Points : 4)
was very active during the former crisis, while it was basically passive during
the latter crisis.
stood idly by during the former crisis, but took dramatic actions during
the latter crisis.
was not yet in existence during the 1930s.
was a much bigger institution in the 1930s than it is today.

Question 12.12. (TCO 7) Which one of the following is a tool of monetary policy
for altering the reserves of commercial banks? (Points : 4)
Issuing currency
Check collection
Open-market operations
Acting as the fiscal agent for the federal government

Question 13.13. (TCO 7) The Federal Reserve could reduce the money supply by
(Points : 4)
selling government bonds in the open market.
buying government bonds in the open market.
operating the term auction facility.
reducing the discount rate.

Question 14.14. (TCO 8) Which nation has greatly increased its role in
international trade in recent years? (Points : 4)
Japan
Iran
Peru
China

Question 15.15. (TCO 8) In a two-nation world, comparative advantage means that
one nation can produce (Points : 4)
a product with fewer inputs than the other nation.
a product at lower average cost than the other nation.
a product at a lower domestic opportunity cost than the other nation.
more of a product than the other nation.

Question 16.16. (TCO 8) If a nation imposes a tariff on an imported product,
then the nation will experience a(n) (Points : 4)
decrease in total supply and an increase in the price of the product.
decrease in demand and a decrease in the price of the product.
decrease in supply of, and an increase in demand for, the product.
increase in supply of, and a decrease in demand for, the product.

Question 17.17. (TCO 8) Tariffs and quotas are costly to consumers because
(Points : 4)
the price of the imported good falls.
the supply of the imported good increases.
import competition increases for domestic go

consumers shift purchases to domestically-produced goods.