ECON 2301 Exam 3 (Lee)
Questions
Fill answers on a scantron (form No. 882-E) with a pencil. Erase all unwanted pencil marks.
Chapters: 14, 15, 16, 33, 34
1) In the current year, a nation's government spending equals $xx trillion and its revenues are $xx trillion. Which is true?
2) The public debt can be thought of as
3) The fastest growing component of the annual federal budgets since 2000 is
4) Money is defined as
5) When you buy a hamburger for lunch, you are using money as a
6) A government bond is not as liquid as cash because the bond
7) In defining money as M1, economists exclude time deposits because
8) If people withdraw $xx million from the nation's money market deposit accounts and redeposit the funds in various checkable and debitable accounts, then
9) One of the functions of money is that it can serve as a means to store value. However, this function of money can gradually disappear when
10) Which of the following is NOT a function of the Federal Reserve System?
11) When the economy experiences a high inflation rate and high output growth, the central bank’s monetary policy would involve all of the following EXCEPT
12) Federal Reserve notes are
13) Fractional reserve banking can be thought of as a bank
14) A bank has $2 million in transaction deposits. The required reserve ratio is xx percent. What is the maximum amount of loans that this bankcan make?
15) Given a required reserve ratio of xx percent, a commercial bank that has received a new deposit of $xx can make additional loans of
16) If the Fed wants to reduce reserves in the banking system, it will most likely
17) The primary tool the Fed uses to control the money supply is
18) The Federal Open Market Committee has responsibility for
19) When the Fed buys a U.S. bond in the open market
20) Suppose the Fed sells government securities on the open market. This monetary policy action will cause
21) If the Fed wants to add reserves to the banking system, it should
22) The required reserve ratio equals xxx percent and all banks initially have zero excess reserves. The Fed buys $1 million in U.S. government securities. The most the money supply can
23) If the Fed wants to increase the money supply, it can
24) Assume that U.S. producers can manufacture cookies at a lower opportunity cost than Canadian producers. If this is the case,
25) If Kamilah can produce XX computers or XX radios during a month's time, while Sally can produce XX computer or XX radios during the same period, then it is correct to state that
26) A country will specialize in the good for which
27) Refer to the above table. The opportunity cost of producing a computer in the United States is equal to ______, and the opportunity cost of producing a computer in Mexico is ______.
28) Refer to the above table. Which of the following is a correct statement?
29) Refer to the above table. If the two countries trade,
30) In the long run, if a country’s imports increase, then its exports
31) One argument against free trade is the
32) The balance of payments is
33) Suppose a country has a current account surplus and that there is no intervention by finance ministries or central banks. This current account surplus indicates that the country has
34) Suppose that the current exchange rate between the dollar and peso is $1 equals 10 pesos. If the exchange rate changes to $1 equals 8 pesos, which of the following is true?
35) As the dollar price of the euro increases,