Macroeconomics Questions

inflation is defined as a steady and persistent increase in the general level of prices. It is the rate at which your money loses its ability to buy goods and services

In a boom cyclical unemployment is ...

In a recession cyclical unemployment is ...

What loses a larger proportion of its value with hyperinflation?

What is the expenditure approach for calculating GDP?

Where is the long-run equilibrium on the aggregate production function and investment graph?

what years were a long period of economic success

Until​ 1946, residents of the island of Yap used large​ doughnut-shaped stones as financial assets. Although prices of goods and services were not quoted in terms of the​ stones, the stones were often used in exchange for particularly large​ purchases, such as payments for livestock. To make the​ transaction, several individuals would place a large stick through a​ stone's center and carry it to its new owner. A stone was difficult for any one person to​ steal, so an owner typically would lean it against the side of his or her home as a sign to others of accumulated purchasing power that would hold value for later use in exchange. Loans would often be repaid using the stones. These stones performed the following functions of moneyLOADING...​:A.medium of​ exchange, store of​ value, and standard of deferred payment functions of money.B.unit of​ accounting, store of​ value, and standard of deferred payment functions of money.C.medium of​ exchange, unit of​ accounting, and store of value functions of money.D.medium of​ exchange, unit of​ accounting, and standard of deferred payment functions of money.

Required reservesA.are equal to​ 100% of deposits in a fractional reserve banking system.B.currently must be no more than​ 5% of the total checkable deposits of a depository institution.C.are the minimum amount of legal reserves that a depository institution must have to back up its checkable deposits.D.are the minimum amount of reserves that must be loaned out by a depository institution.

If the economy is operating at less than full​ employment, expansionary monetary policy will shift the aggregate demand curve to the​ ________ and the price level will​ ________.A.​right; decreaseB.​left; increaseC.​left; decreaseD.​right; increase

Fiscal policy is likely to be least effectiveA.when it is automatic.B.during normal economic times.C.during wartime.D.when it is permanent.

Crowding out occurs whenA.increases in investment and consumption cause interest rates to​ rise, reducing the ability of the government to borrow funds.B.decreases in government spending cause interest rates to​ rise, reducing investment and consumption.C.increases in taxes cause interest rates to​ rise, reducing investment and consumption.D.increases in government spending cause interest rates to​ fall, reducing investment and consumption.E.increases in government spending cause interest rates to​ rise, reducing investment and consumption.

If the Fed increases the discount​ rate, relative to the federal funds​ rate, then thisA.would cause the required reserve ratio to decrease.B.would cause the money supply to increase.C.would increase the cost of funds for institutions borrowing from the Fed.D.would decrease the cost of funds for institutions borrowing from the Fed.

What backs up the value of U.S.​ dollars?A.Gold.B.Faith that the dollars represent command over goods and services.C.Gold denominated Federal Reserve System assets.D.Foreign currency reserves held by the Federal Reserve System.

When there is​ ________ gap, the government would increase spending in an attempt to shift the aggregate demand curve to the​ ________.A.a​ recessionary; leftB.an​ inflationary; rightC.a​ recessionary; rightD.an​ inflationary; left

In a​ recession, automatic stabilizers such as the tax system work byA.increasing government spending and reducing taxes without requiring that a new policy be implemented.B.allowing Congress to implement new policies to increase government spending and reduce taxes.C.allowing Congress to implement new policies to reduce government spending and increase taxes.D.decreasing government spending and increasing taxes without requiring that a new policy be implemented.

Increases in output and increases in the inflation rate have been linked toA.discretionary tax policy.B.discretionary government spending.C.higher rates of interest.D.increases in the money supply.

One-time tax rebates generally result in significant changes in consumer spending.A.FalseB.True

Which of the following best describes the linkage between money and​ prices?A.Money and prices are not related to each other.B.Decreasesin the money supply are directly related to decreases in prices in the long run.C.Increasesin the money supply are directly related to decreases in prices in the long run.D.Decreasesin the money supply are directly related to increases in prices in the long run.

During normal economic​ times, when there is not​ "excessive" unemployment or​ inflation, discretionary fiscal policyA.is used frequently to effectively​ fine-tune the economy.B.is not used due to legal restrictions on the ability of Congress to make policy.C.is probably not very effective due to lags and the uncertainty created by repeated tax policy changes.D.is a way of effectively spurring economic growth.