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5 Written questions

5 Matching questions

  1. Excess Reserves
  2. Discount Rate
  3. Expansionary Monetary Policy
  4. Bank Assets
  5. Sole Proprietor
  1. a Things that an economic unit owns that have value
  2. b any reserves held beyond the required amount. No interest earned on these reserves
  3. c A decrease in the discount rate and Federal Funds Rate which makes it cheaper for banks to borrow from the Fed and encourages banks to borrow; an open market purchase by the fed
  4. d Firm with a single owner who has the right to all profits and who bears unlimited liability for the firm's debts
  5. e The interest rate that banks pay to the Fed when banks need to borrow from the Fed. This is known as a penalty for violating the required reserve ratio

5 Multiple choice questions

  1. when the rate of inflation turns out to be roughly what most people had expected
  2. To produce each additional increment of a good, a successively larger increment of an alternative good must be sacrificed if the economy's resources are already being used efficiently
  3. same good produced w/ better quality get more value for the same price
  4. goods purchase by households for immediate satisfaction or to use up (ex. food, movies)
  5. Insures deposits up to $100,00; Made to reduce number of bank panics

5 True/False questions

  1. Wealth of NationsA contraction of a nation's output accompanied by an inflation in the price level


  2. Full Employment of resourcesif an economy moves from one point ot another along its production possibilities frontier


  3. Balanced BudgetShows the assets, liabilities and net worth of an organization. Also know as a "t account"


  4. Fallacy of False CauseThe incorrect belief that what is true for the individual, or part, must necessarily be true for the group, or whole.


  5. Fractional Reserve BankingThe minimum percentage of deposits that a bank must keep as reserves