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Macro Final

Macro Ecnomics for FBU

Question	Answer
Say's Law is	Was a basic Pillar of classical Economics
Which Question did John Maynard Keynes pose for the classical economists	What if savings and investment were not equal?
out ecnomy is always tending towards fll employment according to	The classical economists
At Equilibrium GDP	Savings= investment and aggregated demand= Aggregate Supply
Which statement is true	The classical believed the equilibrium GDP and full employment GDP are equal but Keynes did not
Laissez-faire economics was advocated by	the classicals by not by keynes
According to the classical economist, if the amount of money people are planning to invest is greater than the amount that people want to save	interest rates will rise and savings will fall
which best describes the classical theory of employment	We will occasionally have some unemployment but out economy will automatically move back towards full employment
According to the classicals, Our ecnonomy can produce beyond the full employment output	Only in the short run
according the Keynes and equilibrium below full employment is	a strong possibilities
To fight a depressiong keynes said that the government should	spend alot of money
underwhat condidtion will an increase in aggregate demand result in no increase in the price level	The aggregate demand curve intersects the horizontal segment of the aggregate supply curve
The price level rises more rapidly as the maximum output level is approached along an aggregate supply curve because	the costs of additional units of aggregate output begin to rise more rapidly causing firms to seek higher prices to cover these rising costs.
The classical theory of employment held that	the savings of households would all be borrowed and investmented by businesses
The notion that everything the economy produces is purchesed	sums up say's law
The classical theory of the loanable funds market concluded that	The interest rate would equate saving and investment and thereby cause say's law to be valid
To close a recessionary gap we should	Raise G and lower Taxes
Budgets deficits are appropriate during	recessions but not inflation
Which statement is true about automatic stabilizers	They have helped smooth out the business cycle
if we passed a constitutional amendment requiring a balanced budget every year, this would probably	make out recessions into depressions
If equilibrium GDP is 1 trillion greater that full employment GDP and there is an inflationary gap of 250 billion the multiplier is	4
if full employment GDP is 1 trillion greater that equilibrium GDP, and there is a recessionary gap of 400 billion the multiplier is	2.5
. If equilibrium GDP is $500 billion greater than full employment GDP and the multiplier is 2.5, there is an inflationary gap of	200 Billion
If full employment GDP is $500 billion greater than equilibrium GDP and the multiplier is 5, there is a recessionary gap	of 100 billion
We have an inflationary gap when	equilibrium GDP is greater than full employment GDP.
Which statement is true	Over 50 percent of the outstanding public debt is owed by foreigners.
In the 1930s, John Maynard Keynes said that our main economic problem was	Weak aggregate demand
If G = $800 billion, tax receipts = $850 billion, and there is an inflationary gap of $100 billion, there is	A budget surplus
Which of the following is not money	GOLD
Which statement is true A. M1 is larger than M3. B. M2 is about five times the size of M1. C. M3 is three times the size of M2. D. None of the statements are true.	M@ is about five times the size of M1
People tend to hold more money as	The price levels rises and credit availability falls
Back in the middle ages the only safe place to put your money was	in goldsmiths' safes
All large finacial institutions have to hold a reserve of almost ______% of their demand deposits	10
Which one of the following is not part of our money supply	GOLD
Which statement is true A. M1 is larger than M2. B. M1 + M2 = M3. C. M2 + large denomination time deposits = M3. D. M1 times M2 = M3	C.
Money is created when someone	takes out a bank loan
bank deposit creation is limited by	reserve requirements
John Maynard Keynes said that people have three motives for holding money. Each of the following is a Keynesian motive except A. inflation. B. transactions. C. speculative. D. precautionary.	A.
The ______ Demand for money is most sensitive to interest rate change	Speculative
The moment modern Banking was born was when	A. the number of goldsmiths' receipts exceeded the number of gold coins kept in goldsmiths' safes.
Which is true? A. M1 is part of M2, but M2 is not part of M3. B. M1 is not part of M2, but M2 is part of M3. C. M1 is part of M2, and M2 is part of M3. D. None of the choices are true.	C.
People tend to hold more money as	The price level rises and interest rates fall
The united states did not have a central bank until	1913
When there is great deal of inflation the fed will	Sell securities on the open market
Our currency is issued by	the federal reserve
Which is not a job of the federal reserve? A. Check clearing B. Issuing currency C. Insuring bank deposits D. Controlling the rate of growth of the money supply	C.
Which statement is true? A. Actual reserves – required reserves = excess reserves. B. Required reserves – actual reserves = excess reserves. C. Required reserves + actual reserves = excess reserves. D. None of the statements are true.	A.
If you wrote a check for $37.55 to pay your phone bill and sent it to Verizon,	your bank's deposits would go down by $37.55 and its reserves would go down by $37.55.`
Which statement is true? A. We have had a central bank since 1789. B. We have never had a central bank. C. Our central bank was formed in 1913. D. We did not have a central bank prior to the Federal Reserve.	c.
Prior to October 2008, commercial banks tended to hold relatively small amounts of excess reserves because	The Fed did not pay interest n reserves
True or false The president basically makes monetary policy. and The Board of Governors of the Fed serves at the president's pleasure and can be summarily dismissed.	True
Required reserves are	equal to total reserves minus excess reserves
If the required reserve ratio was lowered	The size of the monetary multiplier would increase
The federal open marker committee has ______ members	12
The rate of growth of our money supply is controlled by	the federal reserve
During the course of bad recession the fed would probably be doing each of the following except	Selling securities on the open market
The federal open market committee is made up of all of the following except	ther president of the US
The board of governors of the federal reserve is independent of	both the president and congress
Which of the following federal reserve banks is most instrumental in carrying out the policy directive of the board of governors	The federal reserve bank of new york
When the fed buys US bonds	. excess reserves in commercial banks are increased immediately.
The deposit expansion multiplier is	the reciprocal of the reserve ratio

Created by: AWherle

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