Macroeconomics

Banks create money when they ________.

• Make Loans

• Take Deposits

• Hold excess reserves

• Pay withdrawals to depositors.

The central bank in the USA that regulates the monetary system?

• The Fed

• FDIC

The Consumer Price Index (CPI) can be defined as

• The market value of all final goods and services

• A measure of inflation based on the cost of a fixed "market basket"

Sam, who is 55 years old and has been a steelworker for 30 years, is unemployed because the steel plant in his town closed and moved to Mexico. Sam is experiencing:

• Cyclical

• Frictional

• Structural

James borrows $10,000 from the bank. By the time the loan is repaid, James has paid the bank $10,400. What does the additional $400 represent?

• Inflation Rate

• Purchasing Power of Money

• Interest

• Investment

If a 100 deposit in a bank leads to a 1000 increase in the money supply, the reserve requirement must have been:

• Point 10

• 10%

• 100%

• 1000%

• Cannot be determined

Gross domestic product (GDP)

• is the sum of all exchanges of goods and services during a period.

• includes financial transactions such as the purchase of stocks or bonds traded during a period.

• includes the purchases of goods at intermediate stages of production.

• is the sum of the total spending on all final-user goods and services produced domestically during a period.

• includes all goods and services exchanged during a period

Which of the following would be an appropriate monetary policy measure to combat inflation?

• Increase Taxes

• Decrease Taxes

• Sell bonds

• Buy Bonds

• Lower the Reserve Requirement

All of the following are currently part of the United States money supply, EXCEPT:

• Coins

• Currency

• Checkable accounts

• Credit Cards

• Demand Deposits

An example of the fictionally unemployed is a(n):

• A) autoworker who is temporarily laid off because of a decline in sales.

• B) geologist who is permanently laid off from an oil company due to a new technological advance.

• C) worker at a fast-food restaurant who quits work and attends college.

• D) real estate agent who leaves a job in Texas and searches for a similar, higher-paying job in California