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Economics Final

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Business cycles
Recurring upswings and downswings in an economy's real GDP over time are called:
A recession
The phase of the business cycle in which real GDP declines is called:
the trough
The phase of the business cycle in which real GDP is at a minimum is called:
expansion
In which phase of the business cycle will the economy most likely experience rising real output and falling unemployment rates?
full-employment unemployment rate
The natural rate of unemployment is the:
percentage of the labor force that is unemployed
The unemployment rate is the:
frictionally unemployed
Kara voluntarily quit her job as an insurance agent to return to school full-time to earn an MBA degree. With degree in hand she is now searching for a position in management. Kara presently is:
structural and frictional unemployment
Which of the following constitute the unemployment occurring at the natural rate of unemployment?
cyclical unemployment
The type of unemployment associated with recessions is called:
Bureau of Labor Statistics
The government agency responsible for collection and reporting unemployment data is the:
actual GDP and potential GDP
The GDP measures the difference between;
shows the relationship between the unemployment rate and the size of the negative GDP gap
Okun's Law:
demand-pull inflation
"Too much money chasing too few goods" best describes
tie wage increases to changes in the price level
Cost-of-living adjustment clauses: (COLA)
Council of Economic Advisers
The group of three economists appointed by the President to provide fiscal policy recommendations is the :
the Federal government
Fiscal policy is carried out primarily by:
is designed to expand real GDP
Expansionary fiscal policy is so named because it
require no legislative action by Congress to be made effective
A major advantage of the built in or automatic stabilizers is they
subtracting government tax revenues from government spending in a particular year
The federal budget deficit is found by:
budget deficit
The amount by which government expenditures exceed revenues during a particular year is the
all of the above
Money functions as:
store of value
If you place apart of your summer earnings in a savings account, you are using money primarily as
a means of payment
When economists say that money serves as a medium of exchange, they mean that it is
a monetary unit for measuring and comparing the relative value of goods
When economists say that money serves as a unit of account, they mean that it is:
Federal Reserves notes
The paper money used in the United States is:
coins, paper currency, and checkable deposits
In the United States, the money supply (M1) is comprised of
included in M1
Checkable deposits are:
Federal Reserve Banks
Paper money (currency) in the United States is issued by the:
Federal Reserve Note
a $20 bill is a :
Board of Governors of the Federal Reserve
the basic policy making body in the U.S. banking system is the
1913
The federal reserve system was created in
Federal Reserve System
In the US economy the money supply is controlled by the
Federal Open Market Committee
As it relates to Federal Reserve activities, the acronym FOMC describes the
FOMC
The group that sets the Federal Reserve Systems policy on buying and selling government securities
There are seven members of the Federal Reserve Board of Governors
Which one of the following is true about the US Federal Reserve system
There are 12 regional Federal Reserve Banks
Which one of the following is true about the US Federal Reserve system
7
The board of governors of the federal reserve has ____ members
serve 14 year terms
The members of the Federal reserve board
fractional reserves
Most modern banking systems are based on
deposits at the Federal Reserve bank and vault cash
The reserves of a commercial bank consist of
provide a means by which the monetary authorities can influence the lending ability of commercial banks
The primary purpose of the legal reserve requirement is to
excess reserves
The amount that a commercial bank can lend is determined by
its checkable deposits multiplied by the reserve requirement
the amount of reserves that a commercial bank is required to hold is equal to
banks borrow reserves from one another on an overnight basis
The Federal funds market is the market in which
medium of exchange
The transactions demand for money is most closely related to money functioning as a
store of value
The asset demand for money is most closely related to money functioning as a
open market operations
Which of the following is a tool of monetary policy
Board of Governors of the Federal Reserve System
In the United States monetary policy is the responsibility of the
the discount rate, the reserve ratio, and open market operations
The three main tools of monetary policy are
borrowing from a Federal Reserve Bank
A commercial bank can add to its actual reserves by
Federal Reserve Banks lend to commercial banks
The discount rate is the rate of interest at which
Federal funds rate
The interest rate that banks charge one another on overnight loans is called the
raise interest rates and restrict the availability of bank credit
The purpose of a restrictive monetary policy is to