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WorksheetsUnit 4 AP Macro
Total questions: 15
Worksheet time: 15mins
What's his name & Economic School of Thought?
John Keynes
Fiscal
Adam Smith
Monetarist
Adam Smith
Classical
Milton Friedman
Monetarist
Which of the following will happen if the central bank of a nation purchases government bonds on the open market?
The monetary base will increase and the money supply will not change.
The monetary base will increase and the money supply will increase.
The monetary base will decrease and the money supply will increase.
The monetary base will decrease and the money supply will not change
On the island of Mabera, the local money is called “favoli.” The price of every good in Mabera is expressed as the number of favolis needed to buy the good. The use of favolis to express the price of goods is ...
Medium of exchange
Means of payment
Unit of account
Store of value
Which of the following is a primary function of money in an economy?
Medium of exchange
Store of value
Unit of account
All of the above
If the reserve requirement is 10% and a bank receives a new deposit of $1,000, how much can the bank lend out?
$100
$900
$1,000
$10,000
What is the main tool used by the Federal Reserve to control the money supply?
Open market operations
Changing the discount rate
Altering the reserve requirement
Printing more money
In the short run, an increase in aggregate demand is most likely to cause which of the following?
An increase in unemployment
A decrease in the price level
An increase in the price level
A decrease in real GDP
Which of the following best describes the concept of 'liquidity'?
The ease with which an asset can be converted into cash
The interest rate charged by banks
The total amount of money in circulation
The value of a country's exports
What happens to the value of money when the inflation rate increases?
The value of money increases
The value of money decreases
The value of money remains the same
The value of money becomes unpredictable
Which of the following is an example of fiscal policy?
Increasing the money supply
Decreasing the interest rate
Increasing government spending
Reducing the reserve requirement
What is the primary goal of monetary policy?
To control inflation
To increase government revenue
To reduce unemployment
To balance the budget
If a country's currency appreciates, what is the likely effect on its exports?
Exports become cheaper
Exports become more expensive
Exports remain unchanged
Exports increase
Which of the following is a consequence of a government budget deficit?
Increased national savings
Decreased interest rates
Increased borrowing
Decreased inflation
What is the effect of a contractionary monetary policy on interest rates?
Interest rates decrease
Interest rates increase
Interest rates remain unchanged
Interest rates become volatile
Which of the following is a characteristic of a recession?
High inflation
High employment
Decreasing GDP
Increasing consumer spending
