ECO Exam 4
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| show | When the government conducts fiscal policy, it makes up for a decrease in with:
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| In a fractional reserve banking system, banks hold only a fraction of their | show 🗑
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| If a $500 increase in reserves ultimately leads to a $2,000 increase in the money supply, the reserve ratio is: | show 🗑
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| When the Fed buys short-term Treasury securities, short-term interest rates | show 🗑
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| .The Term Auction Facility involves the Federal Reserve: | show 🗑
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| show | solvent and illiquid
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| show | Monetary policy is subject to uncertain lags.
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| Suppose the tax rate on the first $20,000 of income is 0%; 10% on the next $20,000 earned; and 20% on any additional income earned. The average tax rate for a person earning $35,000 is: | show 🗑
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| The alternative minimum tax: | show 🗑
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| Whereas covers the elderly, covers the poor and the disabled | show 🗑
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| show | government expenditure, borrowing, and taxation to influence the business cycle
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| Which of these would help a government fight a recession? | show 🗑
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| show | an increase in −→G
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| show | crowding out, a drop in the bucket, a matter of timing, and real shocks
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| show | regressive tax
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| show | providing loans to small businesses
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| show | bond mutual funds
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| To increase the money supply in the economy, the Fed would: | show 🗑
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| Which is an example of quantitative easing by the Federal Reserve? | show 🗑
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| What is the overnight lending rate from one bank to another? | show 🗑
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| Systemic risk is present when | show 🗑
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| The best type of negative shock for the Federal Reserve to respond to is a negative shock to: | show 🗑
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| . An increase in money growth will cause the inflation rate to increase in: | show 🗑
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| The largest source of revenue for the U.S. federal government is | show 🗑
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| The FICA tax burden is: | show 🗑
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| During what period did this economy experience deflation? | show 🗑
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| During what period did this economy experience disinflation? | show 🗑
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| The purpose of FICA taxes is to fund: | show 🗑
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| show | recognition lag
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| show | point V
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| show | an inflation rate much greater than 16%
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| Debt held outside the U.S. government is called the: | show 🗑
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| Which statement pertains to the condition of crowding out? | show 🗑
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| Why did the tax rebate of $78 billion in 2008 have few net stimulus benefits? | show 🗑
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| The annual difference between federal spending and revenues is called the: | show 🗑
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| What is the setting of the 1988 Christmas movie “Die Hard?” | show 🗑
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| show | the AD curve.
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| Which asset would you classify as being most liquid? | show 🗑
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| The main difference between M1 and M2 is that: | show 🗑
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| If the reserve ratio is 4%, the money multiplier is | show 🗑
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| Suppose the reserve ratio is 20% for all banks. If the Fed increases bank reserves by $200, then the money supply will: | show 🗑
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| show | open market operations, discount rate lending, and paying interest on reserves.
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| To increase the money supply in the economy, the Fed would: | show 🗑
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| To reduce the money supply in the economy, the Fed would: | show 🗑
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| show | The Fed purchases $50,000 worth of long-term government bonds.
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| show | the Federal Funds rate
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| show | illiquid, but solvent.
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| show | systemic risk
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| show | inflation, real growth, and nominal wage growth will all decrease.
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| show | The Fed must operate in real time, when a lot of the data about the state of the economy are unknown
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| To offset the effect of negative growth in money velocity (-->v), the central bank should | show 🗑
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| show | inflation
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| show | boost market confidence
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| show | increase ; do nothing
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| In the long run, a negative real shock will cause output growth to: | show 🗑
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| show | increase
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| What monetary policy philosophy is against tying the hands of the central bank? | show 🗑
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| show | Mv
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| show | exceeds the average tax rate for most income levels.
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| The tax rate paid on an additional dollar of income is the: | show 🗑
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| show | $1,500.
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| The largest spending program for the U.S. federal government is | show 🗑
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| Which of the following statements about the Social Security program is correct? | show 🗑
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| The money you pay into Social Security goes to | show 🗑
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| show | regressive tax.
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| show | elderly.
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| The Medicaid program offers health-care benefits for the | show 🗑
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| Suppose you are a married person with one child but your whole family earns less than $20,000 a year. Which of the following will supplement your income? | show 🗑
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| show | 5 years
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| Bill Clinton's administration experienced a federal budget surplus. Which of the following is therefore correct? | show 🗑
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| Government spending on “interest on the debt” refers to | show 🗑
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| show | national debt held by the public
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| What demographic change in the United States will cause government spending to increase in the next 50 years? | show 🗑
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| primary tools of fiscal policy are | show 🗑
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| Which of these would help a government fight a recession? | show 🗑
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| show | shifts to the left
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| When falls, the LRAS c curve | show 🗑
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| show | an increase in G
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| Which of the following limits the effectiveness of fiscal policy? | show 🗑
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| What are the four major limits to fiscal policy? | show 🗑
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| show | legislative lag
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| The time necessary to determine that an economic problem exists is called the: | show 🗑
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| show | legislative lag
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| show | implementation lag.
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| show | effectiveness lag
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| What is the Federal Reserve? | show 🗑
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| show | Maintains the bank accounts and manages the borrowing of the united States treasury.
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| show | Large private banks keep their own account of the federal Reserve (manages the nations payment system)
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| show | Any widely accepted form of payment
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| show | paper bills and coins
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| Are credit cards money? | show 🗑
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| show | 1. Currency
2. Federal Reserve
3. Checkable Deposit
4. Savings deposits money market
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| What are liquid assets? | show 🗑
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alishabenefield