Questions from General Economics

Q: 2.1. Banks are required by law to keep a

2.1. Banks are required by law to keep a fraction of their deposits as _________. 2.2. When reserves do not pay interest, banks prefer to keep reserves rather than make loans. _________ (True/ False)...

Q: 1.1. Money provides a convenient measuring rod when the

1.1. Money provides a convenient measuring rod when the _________ of all goods are expressed in _________ terms. 1.2. Gold is a good example of commodity money. _________ (True/False) 1.3. In the Un...

Q: 4.1. The Federal Reserve arranged for JPMorgan Chase &

4.1. The Federal Reserve arranged for JPMorgan Chase & Co. to _________ Bear Stearns during the financial crisis in 2008. 4.2. The Federal Reserve helps finance the deficit of the U.S. government by...

Q: 3.1. Interest rates typically rise in booms because the

3.1. Interest rates typically rise in booms because the demand for money depends _________ on changes in real income. 3.2. If interest rates are 12 percent per year, the price of a bond that promises...

Q: 2.1. To increase the supply of money, the

2.1. To increase the supply of money, the Fed should _________ bonds. 2.2. An increase in price levels leads to _________ money demand. 2.3. Banks trade reserves with one another in the _________ ma...

Q: 4.1. When the Federal Reserve buys bonds on the

4.1. When the Federal Reserve buys bonds on the open market, it leads to _________ (increase/decreases) in the price of bonds. 4.2. To decrease the level of output, the Fed should conduct an open mar...

Q: 5.1. _________ (Inside/Outside) lags would

5.1. _________ (Inside/Outside) lags would be longer for the European Central Bank. 5.2. Compared to fiscal policy, the outside lag for monetary policy is longer for monetary policy. _________ (True/...

Q: 1.1. We measure the opportunity cost of holding money

1.1. We measure the opportunity cost of holding money with _________. 1.2. If interest rate decreases, investment spending _________ (increases/decreases) and money demand _________ (increases/decrea...

Q: 2.1. If output is less than potential output,

2.1. If output is less than potential output, prices _________ and the short-run aggregate supply curve shifts _________. 2.2. Output will automatically return to full employment in the long run if i...

Q: 1.1. Wages and prices will fall when unemployment falls

1.1. Wages and prices will fall when unemployment falls below its natural rate. _________ (True/False) 1.2. The short run in macroeconomics is the time period over which _________ do not adjust to ec...