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Fresh Grad Lands Job as Real Estate Agent With Help from Professional Writers

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Test 3 Ch 8-10

Navigation   » List of Schools  »  Los Angeles Mission College  »  Economics  »  Economics 002- Principles of Economics II  »  Fall 2022  »  Test 3 Ch 8-10

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Below are the questions for the exam with the choices of answers:

Question #1
An individual member of a currency union can change its exchange rate to ease adjustment if it experiences an unfavorable economic shock.
A  False
B  True
Question #2
Which of the following items is included in M2, but not in M1?
A  Travelers checks
B  Treasury bills (T-bills)
C  Savings deposits
D  Currency
Question #3
An increase in net taxes will shift the aggregate demand curve to the right.
A  True
B  False
Question #4
The aggregate supply curve shows an inverse relationship between prices and real planned expenditure.
A  True
B  False
Question #5
The price of Mexico’s currency in terms of that of the United States is the ______________.
A  currency ratio
B  foreign exchange
C  exchange rate
D  balance of payments
Question #6
If a country experiences inflation, its exports become less competitive and its imports tend to increase, which puts a drag on the economy.
A  False
B  True
Question #7
When a country’s exchange rate appreciates, its residents find it _______ expensive to buy goods made in other countries, and imports ___________.
A  more; decrease
B  less; increase
C  more; increase
D  less; decrease
Question #8
Fiscal policy changes can shift the position of the aggregate demand curve.
A  False
B  True
Question #9
In an aggregate demand curve diagram, what is plotted on the horizontal axis?
A  Nominal output
B  Average price level
C  Aggregate demand
D  Real output
Question #10
Fiscal policy changes can shift the position of the aggregate demand curve.
A  False
B  True
Question #11
The Japanese yen depreciates relative to the USD. What should we expect?
A  A decrease in the number of U.S. tourists visiting Japan.
B  An increase in U.S. demand for Japanese goods
C  An increase in the number of Japanese tourists visiting the United States
D  An increase in Japanese demand for U.S. goods
Question #12
The M1 definition of the money stock focuses on the function of money as a means of payment.
A  False
B  True
Question #13
Quantitative easing involves which of the following?
A  The reduction of the discount rate in order to stimulate lending by commercial banks
B  The use of open-market operations to increase the quantity of reserves held by the commercial banks
C  The reduction of reserves held by the commercial banks
D  The use of open-market operations to increase the quantity of reserves held by the Fed
Question #14
Anything that serves as a unit of account, a store of purchasing power, and a means of payment can be called money.
A  True
B  False
Question #15
Money is called a “liquid asset” because its nominal value is subject to unpredictable changes.
A  True
B  False
Question #16
Monetary policy is the term used for the government policy regarding government spending, taxes, and government debt.
A  False
B  True
Question #17
The four principal components of aggregate demand do not include which of the following?
A  Property values
B  Net exports
C  Government expenditures
D  Planned investment
Question #18
The aggregate supply curve shows the relationship between real GDP and the average price level.
A  False
B  True
Question #19
Real government purchases may fall when the price level rises if which of the following is true?
A  Governments always buy the same quantity of goods and services regardless of how much they cost.
B  Some parts of the government budget are fixed in nominal terms.
C  Governments prefer more expensive goods to less expensive goods because they create more jobs.
D  All parts of the government budget are fixed in real terms.
Question #20
The __________ exchange rate reflects the rate parties experience at the time of a transaction. The ________ exchange rate takes into account the rates of inflation in both countries.
A  nominal; real
B  real; real
C  nominal; nominal
D  real; nominal
Question #21
Deflation power parity is a situation in which goods cost the same in one country as in another when prices are compared using the market exchange rate.
A  True
B  False
Question #22
A decrease in consumer confidence tends to ________ aggregate demand. A decrease in business confidence will ________ aggregate demand.
A  increase; decrease
B  decrease; increase
C  decrease; decrease
D  increase; increase
Question #23
Fiscal policy is policy that is concerned with government purchases, taxes, and transfer payments.
A  False
B  True
Question #24
If the Fed wishes to increase the money supply it could _______ dollar-denominated bonds or _______ bonds denominated in a foreign currency.
A  sell; sell
B  buy; sell
C  buy; buy
D  sell; buy
Question #25
Bonnie withdraws some cash from her checking account at Dolan Bank. Dolan Bank’s assets will ________ and its liabilities will ________.
A  increase; increase
B  decrease; decrease
C  decrease; increase
D  increase; decrease
Question #26
Fiscal policy is policy that is concerned with government purchases, taxes, and transfer payments.
A  True
B  False
Question #27
According to purchasing power parity, when should a nation’s currency appreciate?
A  When its interest rates are expected to decrease
B  When it experiences greater inflation than its trading partners
C  When it does not produce products that are traded on international markets
D  When it experiences lower inflation than its trading partners
Question #28
A decrease in consumer confidence tends to decrease aggregate demand.
A  False
B  True
Question #29
On July 1, the exchange rate between the Canadian dollar (CAD) and the US dollar (USD) is 1 CAD for 0.80 USD. On August 1, the exchange rate is 1 CAD for 1 USD. Over this period of time, what would we say?
A  The CAD neither appreciated or depreciated
B  The CAD has appreciated
C  The CAD has depreciated
D  The USD has appreciated
Question #30
When do U.S. exports tend to increase?
A  When U.S. prices are relatively low
B  When economic activity abroad is relatively low
C  None of the answers
D  When U.S. prices are relatively high
Question #31
If a country experiences inflation, its exports become ________ competitive, which tends to ________ the economy.
A  less; stimulate
B  Less; impose a drag on
C  more; stimulate
D  more; impose a drag on
Question #32
Which of the following instruments is not used by the Fed to change the money supply?
A  State and local tax rates
B  Open-market operations
C  The federal funds rate
D  The required reserve ratio
Question #33
On July 1, the exchange rate between the Canadian dollar (CAD) and the US dollar (USD) is 1 CAD for 0.80 USD. On August 1, the exchange rate is 1 CAD for .70 USD. Over this period of time, what would we say?
A  The CAD has depreciated
B  The CAD has appreciated
C  The CAD neither appreciated or depreciated
D  The USD has depreciated
Question #34
Money market mutual funds are an example of an asset that is highly liquid, but not counted as part of M2.
A  True
B  False
Question #35
The four principal components of aggregate demand do not include which of the following?
A  Net exports
B  Planned investment
C  Net profitability
D  Government expenditures
Question #36
Foreign exchange rates for the U.S. dollar change constantly as supply and demand conditions change.
A  False
B  True
Question #37
A decrease in consumer confidence tends to decrease aggregate demand.
A  True
B  False
Question #38
Other things being equal, which of the following will cause the aggregate demand curve to shift to the right?
A  A decrease in consumer confidence
B  An increase in net taxes
C  An increase in foreign demand for a country’s exports
D  An increase in interest rates
Question #39
If exchange rates and prices in other countries remain constant, then an increase in the U.S. price level will tend to increase U.S. exports.
A  True
B  False
Question #40
Use of the Internet makes it easy to find up-to-minute exchange rates for any pair of currencies that exist.
A  True
B  False
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“Kudos to the team for a job well done.  I am sincerely appreciative of the time and effort you gave on my resume.  You did not only help me land the job I had always been dreaming of but you also made me realize how important adding those specific keywords to my resume!  Cheers!

Manush
Fresh Graduate
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