Monetary Economics
Test Questions
Course Introduction
Monetary Economics explores the role of money and financial institutions in influencing macroeconomic activity. The course examines the nature and functions of money, the structure and operation of monetary systems, the behavior of banks and other financial intermediaries, and the conduct and impact of monetary policy. Key topics include money supply and demand, interest rate determination, central banking frameworks, the transmission mechanisms of monetary policy, and the interaction between monetary factors and real economic variables like inflation, output, and employment. Throughout, students analyze historical and contemporary issues in monetary economics, drawing on both theoretical models and empirical evidence.
Recommended Textbook
Macroeconomics 10th Edition by Stephen Slavin
Available Study Resources on Quizplus
19 Chapters
5438 Verified Questions
5438 Flashcards
Source URL: https://quizplus.com/study-set/3248
Page 2
Chapter 1: A Brief Economic History of the United States
Available Study Resources on Quizplus for this Chatper
258 Verified Questions
258 Flashcards
Source URL: https://quizplus.com/quiz/64528
Sample Questions
Q1) What caused the major economic conflict between the North and the South immediately before the outbreak of the Civil War?
A)Agricultural development.
B)Industrialization in the North.
C)Trade barriers with England.
D)All of the choices are true.
Answer: D
Q2) During World War II,the federal government instituted ______________ to keep down inflation.
Answer: price controls (and wage controls
Q3) Which statement is true?
A)The number of people living on family farms has been increasing in recent years.
B)Most farm subsidy payments go to large corporate farms.
C)Our huge agricultural surpluses have completely eliminated starvation in this country.
D)None of the statements are true.
Answer: B
Q4) Since the Civil War,the poorest section of the country has been the _________.
Answer: South
To view all questions and flashcards with answers, click on the resource link above.
3
Chapter 2: Resource Utilization
Available Study Resources on Quizplus for this Chatper
265 Verified Questions
265 Flashcards
Source URL: https://quizplus.com/quiz/64527
Sample Questions
Q1) The law of increasing costs is based on each of the following,except
A)the law of scarcity.
B)the law of diminishing returns.
C)diseconomies of scale.
D)factor suitability.
Answer: A
Q2) The existence of unemployment can be illustrated on a production possibilities curve by a(n)
A)point below or inside the surface of the curve.
B)inward shift of the curve.
C)movement down along the curve if consumer goods are represented on the vertical axis and capital on the horizontal axis.
D)movement up along the curve if consumer goods are represented on the vertical axis and capital on the horizontal axis.
Answer: A
Q3) At point S,the economy is operating at approximately _______ percent unemployment.
Answer: 2-4%
To view all questions and flashcards with answers, click on the resource link above.
4
Chapter 3: The Mixed Economy
Available Study Resources on Quizplus for this Chatper
262 Verified Questions
262 Flashcards
Source URL: https://quizplus.com/quiz/64526
Sample Questions
Q1) Who said,"Property is the exploitation of the weak by the strong.Communism is the exploitation of the strong by the weak"?
A)Karl Marx
B)Adam Smith
C)Seymour Melman
D)Studs Terkel
E)Pierre-Joseph Proudhon
Answer: E
Q2) In the United States and in most other developed capitalist economies,the government
A)typically plays a significant role in allocating resources and redistributing income.
B)serves to enforce property rights,but plays no role in the allocation of society's resources.
C)is primarily concerned with central planning.
D)employs less than 1% of the labor force.
E)None of the choices are truE.
Answer: A
Q3) One out of every ____ people on this planet lives in China.
Answer: 5
To view all questions and flashcards with answers, click on the resource link above.
Page 5
Chapter 4: Supply and Demand
Available Study Resources on Quizplus for this Chatper
255 Verified Questions
255 Flashcards
Source URL: https://quizplus.com/quiz/64525
Sample Questions
Q1) If the market price is below equilibrium price,
A)quantity demanded is less than quantity supplied.
B)quantity demanded is equal to quantity supplied.
C)quantity demanded is greater than quantity supplied.
Q2) In the graph shown above,if market price were $23 there would be
A)a surplus.
B)a shortage.
C)a surplus and a shortage.
D)neither a surplus nor a shortage.
Q3) When supply increases
A)demand decreases.
B)price increases because excess supply develops at the original price.
C)price decreases because a less supply is available at the original price.
D)price decreases because a excess supply at the original price.
Q4) A)Is a price of $13 a price ceiling or a price floor?
B)Is there a shortage or a surplus?
C)How much is it?
Q5) The price system is constantly sending __________ and ___________ thousands of signals.
Q6) Rent control is a price _____.
Page 6
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: The Household Consumption Sector
Available Study Resources on Quizplus for this Chatper
312 Verified Questions
312 Flashcards
Source URL: https://quizplus.com/quiz/64524
Sample Questions
Q1) The APS rose from about .02 in the first quarter of 2008 to ________ in the second quarter of 2009.
A).025
B).042
C).057
D).102
Q2) Autonomous consumption is A)0.
B)1000.
C)2000.
D)3000.
E)4000.
Q3) Americans spend over _______ of their income on consumption.
A)one-third
B)one-half
C)two-thirds
D)nine-tenths
Q4) How much is induced consumption at a disposable income of 1000?
Q5) How much is induced consumption when disposable income is $10 billion?
Q6) How much is the APS?
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: The Business Investment Sector
Available Study Resources on Quizplus for this Chatper
295 Verified Questions
295 Flashcards
Source URL: https://quizplus.com/quiz/64523
Sample Questions
Q1) Which statement is true?
A)The expected rate of profit is very high during depressions.
B)The best environment for most investment projects is a high rate of interest and a low marginal efficiency of capital.
C)The higher the marginal efficiency of capital,the more likely an investment project will be carried out.
D)None is true.
Q2) Which of the following is not a part of gross private domestic investment?
A)Residential construction.
B)Shopping centers.
C)Changes in business inventories.
D)Corporate stock purchased from a broker.
E)Factories.
Q3) When disposable income is 2,000,how much is savings?
Q4) During recessions,our capacity utilization rate usually falls below A)90.
B)80.
C)70.
D)60.
E)50.
Page 8
To view all questions and flashcards with answers, click on the resource link above.
Chapter 7: The Government Sector
Available Study Resources on Quizplus for this Chatper
301 Verified Questions
301 Flashcards
Source URL: https://quizplus.com/quiz/64522
Sample Questions
Q1) The first year of the New Deal was
A)1929.
B)1933.
C)1945.
D)1952.
E)1960.
Q2) In 2010,a married couple with one child earning $32,000 would pay $2,448.00 in payroll tax and $__________ in federal income taxes.
A)more than $2,000
B)about $1,000
C)more than $750
D)0
Q3) If you earned $10,000 in 2010 working for yourself,how much did the federal government collect in payroll tax? ____.
Q4) The second largest source of federal revenue is
A)the individual income tax.
B)the corporate income tax.
C)the payroll tax.
D)sales and excise taxes.
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: The Export-Import Sector
Available Study Resources on Quizplus for this Chatper
177 Verified Questions
177 Flashcards
Source URL: https://quizplus.com/quiz/64521
Sample Questions
Q1) The trading bloc that has eliminated all internal tariffs is
A)the European Union.
B)NAFTA.
C)Mercosur.
D)the World Trade Organization.
Q2) Our merchandise balance of trade has been negative since the
A)1960s
B)1970s
C)1980s
D)1990s
Q3) Net exports is a negative figure whenever
A)a nation's exports of goods and services exceed its imports.
B)a nation's imports of goods and services exceed its exports.
C)inventories dwindle.
D)gross savings is greater than net investment.
Q4) International trade is ________ important to the Netherlands than it is to the United States.
Q5) Our most important trading partner is ____________.
Q6) The practice of selling a good abroad below cost is known as ____________.
To view all questions and flashcards with answers, click on the resource link above. Page 10
Q7) The ______________________ which was set up in 1995,was the successor to GATT.
Chapter 9: Gross Domestic Product
Available Study Resources on Quizplus for this Chatper
336 Verified Questions
336 Flashcards
Source URL: https://quizplus.com/quiz/64520
Sample Questions
Q1) If real GDP falls from one period to another,we can conclude that
A)deflation occurred.
B)inflation occurred.
C)nominal GDP fell.
D)None of the choices are correct.
Q2) The concept of "net domestic investment" refers to
A)the amount of machinery and equipment used up in producing the GDP in a given year.
B)the difference between the market value and book value of outstanding capital stock.
C)gross domestic investment less net exports.
D)total investment less the amount of investment goods used up in accomplishing the year's production.
E)The total output of capital equipment,construction,and additions to inventories which occur in a given year.
Q3) If the price level has risen by 32% since the base year,the GDP deflator will be ___.
Q4) The GDP component most likely to be negative is ___.
Q5) The per capita GDP was about $____________ and the GPI was about $_________ in 2009.
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Economic Fluctuations, unemployment, and Inflation
Available Study Resources on Quizplus for this Chatper
394 Verified Questions
394 Flashcards
Source URL: https://quizplus.com/quiz/64519
Sample Questions
Q1) If the frictional unemployment rate is 2 percent,the structural unemployment rate is 3 percent,and the overall unemployment rate is 9 percent,how much is the cyclical unemployment rate?
Q2) Which of the following countries had the highest unemployment rate for workers under 25 in 2009?
A)Italy
B)France
C)Great Britain
D)Spain
E)The U.S.
Q3) There was substantial disinflation during
A)most of the 1960s.
B)the late 1970s.
C)the early 1980s.
D)the late 1980s.
Q4) The last recession began in the winter of ____.
Q5) The nominal rate of interest = _____ + ____.
Q6) Label the graph below with respect to inflation,disinflation,and deflation.
Q7) Deflation is ____.
Q8) Business cycle troughs are always followed by the _____ phase. Page 12
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 11: Classical and Keynesian Economics
Available Study Resources on Quizplus for this Chatper
241 Verified Questions
241 Flashcards
Source URL: https://quizplus.com/quiz/64518
Sample Questions
Q1) When the average price level in the United States,relative to the average price level in other countries,falls,this tends to
A)raise imports and exports.
B)lower imports and exports.
C)raise imports and lower exports.
D)lower imports and raise exports.
Q2) The notion that everything the economy produces is purchased
A)sums up Say's law.
B)can be restated as "demand creates its own supply."
C)refers to the real balance effect.
D)was a critical assumption Keynes made in explaining the worldwide depression of the 1930s.
Q3) Keynes's analysis of the Great Depression led to which of the following recommendations regarding government policy?
A)An annually balanced budget.
B)A decrease in government spending.
C)An increase in government spending.
D)An increase in taxes.
E)Government should pursue a laissez-faire attitudE.
To view all questions and flashcards with answers, click on the resource link above.
Page 14
Chapter 12: Fiscal Policy and the National Debt
Available Study Resources on Quizplus for this Chatper
377 Verified Questions
377 Flashcards
Source URL: https://quizplus.com/quiz/64517
Sample Questions
Q1) Statement I: The federal budget deficit is about one-third the size of the national debt.
Statement II: Our federal budget deficit in 1992 was more than double the deficit in 1987.
A)Statement I is true and statement II is false.
B)Statement II is true and statement I is false.
C)Both statements are true.
D)Both statements are false.
Q2) Statement I: To lower a recessionary gap we would raise the C + I + G + Xn line.
Statement II: The best way to eliminate a recessionary gap is to balance the federal budget.
A)Statement I is true and statement II is false.
B)Statement II is true and statement I is false.
C)Both statements are true.
D)Both statements are false.
Q3) As the MPC rises,the multiplier
A)will rise.
B)will fall.
C)will stay the same.
D)may rise,fall,or stay the same.
To view all questions and flashcards with answers, click on the resource link above.
Page 15
Chapter 13: Money and Banking
Available Study Resources on Quizplus for this Chatper
278 Verified Questions
278 Flashcards
Source URL: https://quizplus.com/quiz/64516
Sample Questions
Q1) When the rate of monetary growth is less than the rate of growth of real GDP,most likely in the long run
A)the inflation rate will decrease every year until it reaches zero.
B)the deflation rate will decrease every year until the economy experiences inflation.
C)the average price level will tend to increase over time.
D)the average price level will tend to decrease over time.
Q2) The largest element of the currency component of M1 is A)coins.
B)United States Notes.
C)silver certificates.
D)Federal Reserve Notes.
Q3) A large denomination time deposit is
A)money in a passbook savings account.
B)an S & L share.
C)any money left on deposit in a bank for over one year.
D)any deposit of at least $100,000 left on deposit at a bank for a specified period of time.
Q4) The main purpose of federal deposit insurance is to _________.
Q5) Check-cashing outlets are sometimes called " _________ " banks.
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 14: The Federal Reserve and Monetary Policy
Available Study Resources on Quizplus for this Chatper
365 Verified Questions
365 Flashcards
Source URL: https://quizplus.com/quiz/64515
Sample Questions
Q1) Vault cash would be considered
A)a primary reserve.
B)a secondary reserve.
C)both a primary and a secondary reserve.
D)neither a primary nor a secondary reserve.
Q2) The writing of a $1,000 check that is drawn on Bank A and deposited in Bank B
A)increases the money supply initially by $1,000.
B)reduces total reserves of Bank A by $1,000 and increases the total reserves of Bank B by the same amount.
C)reduces the required reserves of Bank A by $1,000 and increases the required reserves of Bank B by the same amount.
D)reduces the excess reserves of Bank A by $1,000 and increases the excess reserves of Bank B by the same amount.
Q3) If the country is heading into a recession,the Fed might be able to counteract this by
A)increasing the discount rate.
B)carrying out an expansionary fiscal policy.
C)forcing the government deficit to decrease.
D)acting to increase the money supply.
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 15: A Century of Economic Theory
Available Study Resources on Quizplus for this Chatper
308 Verified Questions
308 Flashcards
Source URL: https://quizplus.com/quiz/64514
Sample Questions
Q1) Which of the following is NOT a component of the equation of exchange?
A)The price level
B)The interest rate
C)Real output
D)The velocity of money
E)The supply of money
Q2) The conventional fiscal policy to fight a recession is to ________,while the conventional monetary policy is to ________.
Q3) Which one of the following statements best describes the monetarist view of economic stabilization?
A)Discretionary policies often do more harm than good.
B)Monetary policy should be used to fine-tune the economy.
C)Fiscal policy is more effective than monetary policy.
D)Both monetary and fiscal policy are unable to influence output,employment,and the price level.
E)Discretionary policies are not very helpful but neither are they particularly harmful.
Q4) Supply-side economists believe that,if the marginal tax rates are high,we can raise tax revenue by _______.
To view all questions and flashcards with answers, click on the resource link above.
Page 18
Chapter 16: Economic Growth and Productivity
Available Study Resources on Quizplus for this Chatper
231 Verified Questions
231 Flashcards
Source URL: https://quizplus.com/quiz/64513
Sample Questions
Q1) In which countries of the world has Malthus's prediction come closest to being true?
A)The highly industrialized countries
B)The less developed countries
C)The non-Christian countries
D)The countries in the temperate zone
Q2) The most obvious measure of low levels of economic development is low ____.
Q3) Since 1990,the average number of hours worked per year has
A)Increased.
B)Stayed about the same.
C)Decreased.
D)Decreased by more than one thirD.
Q4) Which of these countries has the lowest per capita GDP?
A)Burundi
B)Brazil
C)Thailand
D)Malaysia
Q5) The most important determinant of a nation's rate of economic growth may be ___.
Q6) U.S.productivity dramatically slowed down in 1973 until the early _________ (decade).
19
To view all questions and flashcards with answers, click on the resource link above.
Chapter 30: Income Distribution and Poverty
Available Study Resources on Quizplus for this Chatper
285 Verified Questions
285 Flashcards
Source URL: https://quizplus.com/quiz/64512
Sample Questions
Q1) Compared to 1960,in 2008 the proportion of retirees living in poverty has fallen from 35 percent to about ________ percent.
A)5
B)10
C)15
D)20
Q2) What is the percentage of income received by the lower three quintiles on line J?
Q3) The poverty rate for blacks is _____________ the poverty rate for non-Hispanic whites.
A)almost three times
B)about 50% more than C)slightly higher than D)a little lower than E)about half
Q4) Which statement is true?
A)Virtually all of the poor receive public assistance,but not food stamps.
B)Virtually all of the poor receive food stamps,but not public assistance.
C)Virtually all of the poor receive public assistance and food stamps.
D)None of the statements are true.
To view all questions and flashcards with answers, click on the resource link above. Page 20
Chapter 31: International Trade
Available Study Resources on Quizplus for this Chatper
268 Verified Questions
268 Flashcards
Source URL: https://quizplus.com/quiz/64511
Sample Questions
Q1) Who said this statement? "If a foreign country can supply us with a commodity cheaper than we ourselves can make it,better buy it from them with some part of the produce of our own industry,employed in a way in which we have some advantage."
A)Adam Smith
B)Fredric Bastiat
C)Murray Weidenbaum
D)Joel Kurtzman
E)Clyde Prestowitz
Q2) It is ______ that a tariff,unlike a quota,provides revenues to the government;it is ________ that a quota directly limits the quantity of a nation's imports from a specific country.
A)true;true
B)false;false
C)false;true
D)true;false
Q3) What is the domestic exchange equation of Italy?
Q4) Italy has an absolute advantage in the production of which product?
Q5) Italy has an absolute advantage in which product?
Q6) We have run trade deficits every year since _______.
Page 21
To view all questions and flashcards with answers, click on the resource link above.
Chapter 32: International Finance
Available Study Resources on Quizplus for this Chatper
230 Verified Questions
230 Flashcards
Source URL: https://quizplus.com/quiz/64510
Sample Questions
Q1) Statement I: In the mid-1980s,for the first time in our history,we became a debtor nation.
Statement II: Foreign assets in the U.S.are substantially greater than U.S.assets abroad.
A)Statement I is true and statement II is false.
B)Statement II is true and statement I is false.
C)Both statements are true.
D)Both statements are false.
Q2) If a U.S.importer has to write a $200 check to cover a 20,000 yen purchase from Japan,the exchange rate is
A)200 yen to a dollar.
B)100 yen to a dollar.
C)20 yen to a dollar.
D)10 yen to a dollar.
E)200 dollars to a yen.
Q3) Which statement is false?
A)Trade is the largest part of our international financial transactions.
B)Our capital account ran a surplus in 2009.
C)We have been on an international gold standard since 1933.
D)None of the statements is false.
To view all questions and flashcards with answers, click on the resource link above.
Page 22