Economics 5th and 6th Week Exam Review

Which of the following applies to a debit card?

• can accrue interest if user does not withdraw

• allows user to purchase items without cash: tied to checking account

• tied to a line of credit; must make monthly payments; user pays back amount owed AND interest

During a period of expansion, there is ...

• low levels of employment

• Low unemployment

• extremely high inflation

• low levels of investment

High unemployment and high levels of inflation probably mean that the country is in which stage of the business cycle?

• expansion

• recession

If a company can decrease the amount of labor needed to increase inventory, it will likely result in...

• decreased productivity

• decreased investment

• economic growth

When new manufacturing technologies are introduced, economic growth is created due to...

• hiring more workers

• economic recession

• increased productivity

The _______ System is a decentralized system of banks that must gain an official charter to join consisting of 12 districts and board members who serve for 14 years.

• Federal Government

• Federal Reserve

• State Tax Commission

Which type of money has intrinsic value (has worth in and of itself), even when not being used for purchases?

• fiat money

• commodity money

• barter system currency

• digital currency

Which of the following applies to money that has value simply because a government has ascribed value to it?

• fiat money

• barter coins

• commodity money

When the Fed practices "easy money policy", it...

• ... is concerned about rapid inflation

• raises interest rates

• lowers interest rates on loans

The Fed is most likely to practice easy money policies during periods of…

• economic expansion

• economic recession