HLST 3250 Lecture Notes - Lecture 3: Discount Window, Accounts Payable, Prime Rate
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| Q1. The total resource cost of goods and services produced by the U. S. economy is known as a. real GDP b. personal income c. national wealth d. national income Q2. The difference between GDP and final sales equals a. depreciation b. exports c. imports d. net inventory change Q3. Current disposable income can be adjusted for price changes and population changes to yield real per capita disposable income. a. true b. false Q4. If a lawn service mows your grass, it is included in the GDP. a. true b. false Q5. In national income accounting, grain fed to a hog at a commercial hog farm is considered a(n) a. final good b. intermediate good c. consumer good d. capital consumption allowance Q6. Imports constitute a minus figure in national income accounting. a. true b. false Q7. The total value added in the production of a final good a. exceeds the price of the final good b. equals the price of the final good c. exceeds the total payments made to owners of productive resources used in the production d. both (b) and (c) Q8. The GDP is reported on a monthly basis by the Department of Commerce. a. true b. false Q9. Transfer payments are added to NI in the process of determining personal income. a. true b. false Q10. U.S. gross domestic product is converted to U.S. gross national product by a. adding the value of output produced by U.S.-owned resources in foreign countries b. subtracting the value of output produced by U.S.-owned resources in foreign countries c. subtracting the value of output produced in the United States by foreign-owned resources d. both (a) and (c) Q11. Final sales are always larger than the GDP. a. true b. false Q12. Because of the value of things produced inside households, (building your own desk, mowing your own lawn, etc.) a. the GDP value is automatically adjusted upward to reflect this b. the GDP value is automatically adjusted downward to reflect this c. Official GDP is surely smaller than true total output d. Official GDP is surely larger than true total output Q13. A government surplus may trigger a decline in the money supply. a. true b. false Q14. Real wages are determined by multiplying money wages by the CPI. a. true b. false Q15. The more volatile the inflation rate, the weaker the money supply as a standard of deferred payment. a. true b. false Q16. An increase in the money supply always causes an increase in the price level. a. true b. false Q17. Your nominal wages rose during the same period from $200 a week to $260. By how much did your real income rise? a. 30 percent b. 16.7 percent c. 8.33 percent d. 12 percent Q18. In the past 10 years or so, average real wages of U.S. workers in nonagricultural industries have a. increased about 40 percent b. increased slightly c. remained about the same d. declined Q19. If a new cash deposit creates excess reserves of $5,000 and the required reserve ratio is 10 percent, the banking system can increase the money supply by a maximum of a. $50,000 b. $500 c. $5,000 d. $4,500 Q20. The effect of a change in the money supply on economic activity may be offset by a change in velocity. a. true b. false Q21. The current base period for the CPI is a. 1967 b. 1977 c. 1982–1984 d. 1990 Q22. In the circular flow, an increase in the money supply tends to result when a. planned I equals planned S b. planned I is less than planned S c. planned I is greater than planned S d. there is a surplus government budget Q23. COLA is a form of indexation. a. true b. false Q24. The total checkable deposits a bank may have can be determined by dividing its reserves by the reserve requirement. a. true b. false Q25. The Financial Services Modernization Act a. reinforced the Glass Steagall Act b. prevented mergers of banks c. eliminated barriers between banks, brokerage houses, and insurance companies d. eliminated all banking regulations Q26. Each Federal Reserve Bank has its own board of directors. a. true b. false Q27. The most frequently used tool of U.S. monetary policy is a. the discount rate b. the reserve requirement c. open-market operations d. moral suasion Q28. When the Fed conducts open-market operations, it primarily uses a. Treasury bills b. long-term U.S. government bonds c. bonds of publicly traded corporations d. overnight loans of major banks Q29. The Board of Governors of the Federal Reserve System has a. 6 members b. 7 members c. 1 member from each Federal Reserve Bank d. 20 members Q30. If the Fed desires to increase checkable deposits, it may lower the reserve requirement. a. true b. false Q31. The interest rate at which banks borrow excess reserves from each other is known as the a. prime rate b. federal funds rate c. discount rate d. T-bill rate Q32. If member banks need to borrow reserves, they must do so through the discount window. a. true b. false Q33. The Fed Chairman appears before Congress semi-annually to present the Monetary Policy Report. a. true b. false Q34. In terms of the total number of payments, which of the following comprises the largest share? a. cash b. personal checks c. debit cards d. credit cards Q35. By buying government securities, the Federal Open Market Committee adds to member banks' reserves. a. true b. false Q36. More than 50 percent of commercial banks in the United States belong to the Federal Reserve System. a. true b. false Q37. The Federal Reserve System is built around a. 4 regional banks b. 6 regional banks c. 12 district banks d. 1 bank with several branches Q38. The time lags lead monetarists to contend that monetary policy is counterproductive. a. true b. false Q39. The marginal propensity to consume is a. the fraction of an increase in income that would be spent on consumer goods b. the additional desire people have for consumer goods c. the fraction of a person's total income normally spent for consumer goods d. the change in consumption resulting from a $1 change in the price level Q40. The consumption function shows a. how fast the economy is consuming its capital b. that the amount of national income determines the rate at which the economy consumes its resources c. that households' incomes determine how much the households will spend for consumer goods d. the rate at which people actually use up their consumer goods Q41. In the simple Keynesian model, if output exceeds aggregate expenditures, a. there will be no response from businesses b. inventories will decrease and businesses will increase output c. inventories will increase and businesses will increase output d. inventories will increase and businesses will decrease output Q42. If planned construction investment increases by $30 billion and the MPC is two-thirds, total output will increase by a. $30 billion b. $20 billion c. $45 billion d. $90 billion Q43. "A given change in business investment will cause a larger change in equilibrium output." This statement describes an important Keynesian concept called the a. multiplier effect b. marginal propensity to consume c. marginal propensity to invest d. consumption function Q44. In the multiplier formula, 1/MPS equals the multiplier. a. true b. false Q45. The classical economists held that chronic unemployment was likely. a. true b. false Q46. As income increases, the absolute level of planned consumption will increase. a. true b. false Q47. The new classical school contends that government fiscal policy is better than monetary policy in controlling inflation. a. true b. false Q48. Higher price levels are associated with lower aggregate expenditure at every level of income. a. true b. false Q49. Any time that planned leakages exceed planned injections, the economy will expand. a. true b. false Q50. According to the Keynesian model, increased foreign spending for U.S. goods is likely to a. reduce total employment in the United States b. increase total employment in the foreign country c. reduce total output in the United States d. increase total output in the United States |
QUESTION 1
If a real asset located in Brazil is sold to someone in the US, the transaction would result in a credit in Brazil's balance of payments.
True
False
6.25 points
QUESTION 2
The balance of payments for a given nation records
only imports and exports of good and servies
only foreign direct investment and portfolio investments between nations
both imports and exporst of good and servieces as well as forein direct investment and portolio investments between nations
QUESTION 36.25 points
Transactions between Canada and the rest of the world are shown below. Use the following information to answer the next four questions.
Canadian citizens receive C$5 million worth of dividends from foreign investments.
Imperial Oil (Canadian firm) invests C$60 million in overseas oil discovery.
Foreign tourists spend C$45 million in Canada.
Canadian government sells C$20 million worth of treasury securities to foreign nations.
Alcan (Canadian firm) sells C$8 million worth of aluminum to US companies.
Canadian government buys C$32 million worth of gold.
Canadian firm buys C$12 million worth of computer components from Sony.
Canada sends C$4 million in aid to Mexico.
Ford spends C$30 million in constructing an assembly plant in Canada.
Find Canada's balance of trade. Enter your final answer in terms of millions of dollars. Do not enter a non-numerical value when inputting your answer.
6.25 points
QUESTION 4
Find the capital account balance (in millions of C$).
| -39 | ||
| 19 | ||
| 70 | ||
6.25 points
QUESTION 5
Find Canada's current account balance. Enter your final answer in terms of millions of dollars. Do not enter a non-numerical value when inputting your answer.
6.25 points
QUESTION 6
Canada's capital account balance suggests that it is a net supplier of capital to the rest of the world.
True
False
6.25 points
QUESTION 7
Suppose a nation has a current account surplus. This surplus implies
| ation | ||
| ation | ||
| none of the above |
6.25 points
QUESTION 8
Suppose that the value of the dollar moves from Ă‚ÂŁ=$1.5 to Ă‚ÂŁ=$1.75. What effect would this have on the UK's balance of trade, all else being equal?
| UK | ||
| UK | ||
| UK | ||
6.25 points
QUESTION 9
There is an inverse relationship between the demand for US exports and the US inflation rate.
True
False
6.25 points
QUESTION 10
Transactions between Great Britian and the rest of the world are shown below. Use the following information to answer the next two questions.
British companies sell 50 million pounds worth of bonds to foreigners.
British government sells 20 million pounds of treasury securities to foreigners.
British citizens receive 2 million pounds in interest from foreign investments.
British companies buy 85 million pounds worth of American produced steel.
GlaxoSmithKline (British firm) sells 40 million pounds of pharmaceutical drugs abroad.
British government buys 15 million pounds of gold in FX market.
British bankers invest 12 million pounds in foreign banks.
Find Great Britian's balance of trade. Enter your answer in terms of millions of pounds. Do not use the pound sign or any other non-numerical value when inputting your answer.
and
Transactions between Great Britian and the rest of the world are shown below. Use the following information to answer the next two questions.
British companies sell 50 million pounds worth of bonds to foreigners.
British government sells 20 million pounds of treasury securities to foreigners.
British citizens receive 2 million pounds in interest from foreign investments.
British companies buy 85 million pounds worth of American produced steel.
GlaxoSmithKline (British firm) sells 40 million pounds of pharmaceutical drugs abroad.
British government buys 15 million pounds of gold in FX market.
British bankers invest 12 million pounds in foreign banks.
Find Great Britian's balance of trade. Enter your answer in terms of millions of pounds. Do not use the pound sign or any other non-numerical value when inputting your answer.