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5 Written questions

5 Matching questions

  1. Special interest effect
  2. Why will Currency Reserves not expand money supply by as much as the potential multiplier?
  3. Labor Demand Curve
  4. Median voter theory
  5. Expenditure Multiplier
  1. a the idea that a vote maximizing politicial in a two party system will be close to the middle so that there is little difference between candidates, and the preferences of the median voter will be represented.
  2. b -Some people decide to hold currency rather than deposit it in the bank
    -Banks fail to use all of the new excess reserves to extend loans
  3. c an issue that generates substantial benefits for a small group by generating minimal costs to a large group.
  4. d Downward sloping because as wage decrease, firms will want to employ more people
  5. e a change in expenditures will have a greater impact than the initial change

5 Multiple choice questions

  1. transfers of income from some individuals to others (social security, unemployment benefits, health care)
  2. a package of spending projects benefiting local areas financed through the federal government
  3. -inverse relationship (negative) between the price of a good and the quantity that buyers are willing to purchase
  4. Money used to buy goods and services
    -fiat money: money that has no intrinsic value
    -More efficient to use money
  5. -Changes in real wealth
    -Changes in real interest
    -Changes in business and household expectations
    -Changes in expected rate of inflation
    -Changes in income abroad
    -Changes in Exchange rates

5 True/False questions

  1. Real Interest Ratepercentage of the amount borrowed that must be paid to the lender in addition to the repayment of the principle.

          

  2. What open market operation decreases the money supply?-Resource Price
    -Changes in expected inflation
    -Supply Shocks

          

  3. Actual Inflation > Anticipated Inflationborrowers lose, lenders gain

          

  4. Higher Tax Rates-discourage work and productivity
    -High tax rates reduce capital formation
    -Encourage people to purchase less desired goods just because they are tax deductible

          

  5. Shifters of Short Run Aggregate Supply-Resource Price
    -Changes in expected inflation
    -Supply Shocks