New Semester
Started
Get
50% OFF
Study Help!
--h --m --s
Claim Now
Question Answers
Textbooks
Find textbooks, questions and answers
Oops, something went wrong!
Change your search query and then try again
S
Books
FREE
Study Help
Expert Questions
Accounting
General Management
Mathematics
Finance
Organizational Behaviour
Law
Physics
Operating System
Management Leadership
Sociology
Programming
Marketing
Database
Computer Network
Economics
Textbooks Solutions
Accounting
Managerial Accounting
Management Leadership
Cost Accounting
Statistics
Business Law
Corporate Finance
Finance
Economics
Auditing
Tutors
Online Tutors
Find a Tutor
Hire a Tutor
Become a Tutor
AI Tutor
AI Study Planner
NEW
Sell Books
Search
Search
Sign In
Register
study help
business
foundations macroeconomics
Macroeconomics For Today 11th Edition Irvin B. Tucker - Solutions
Assume that the economy depicted in part (a) of Exhibit A-3 is in short-run equilibrium with AD and SRAS1. If the economy is left to correct itself according to classical theory,a. wages will fall as long as real GDP is above Yp.b. lower wages will result in a shift from SRAS1 to SRAS2.c. long-run
In part (a) of Exhibit A-3, the economy is initially in short-run equilibrium at real GDP level Y1 and price level P2. Classical theory arguesa. the federal government must shift AD1 to AD2 as shown in part (b).b. the federal government must shift SRAS2 to SRAS1.c. SRAS1 will shift to SRAS2 without
Assume the economy is experiencing an inflationary gap. Classical economists believe thata. flexible wages will restore full employment.b. the federal government should decrease spending to shift the aggregate demand curve leftward.c. the Federal Reserve should lower the interest rate.d. the
Assume the economy is in short-run equilibrium at a real GDP above its potential real GDP.According to classical theory, which of the following policies should be followed?a. The Federal Reserve should use open market operations and buy U.S. government securities.b. The Federal Reserve should not
Assuming the economy is in a recession, Keynesian economists predict thata. wages will remain fixed.b. monetary policy will sell government securities.c. higher wages will shift the short-run aggregate supply curve leftward.d. lower wages will shift the short-run aggregate supply curve rightward.
Assume the economy is experiencing a recessionary gap. Keynesian economists would support which of the following policies?a. Nonstabilizationb. Expansionaryc. Noninterventiond. Fixed wage
A policy to do nothing and allow the economy to self-correct or adjust without interference from the federal government is also called a(an) policy.a. noninterventionb. activec. stabilizationd. fixed rule
Assume the economy is in short-run equilibrium at a real GDP below its potential real GDP. According to Keynesian theory, which of the following policies should be followed?a. The Federal Reserve should decrease the money supply.b. The federal government should increase spending.c. The federal
Assume the economy is experiencing an inflationary gap. Keynesian economists believe thata. flexible wages will restore full employment.b. the federal government should decrease spending to shift the aggregate demand curve leftward.c. the Federal Reserve should lower the interest rate.d. the
Assume the economy is operating at a real GDP above full-employment real GDP. Keynesian economists would prescribe which of the following policies?a. Noninterventionb. Passive monetary policyc. Contractionaryd. Expansionary
Assuming the economy is experiencing a recessionary gap, classical economists predict thata. wages will remain fixed.b. monetary policy should intervene.c. higher wages will shift the short-run aggregate supply curve leftward.d. lower wages will shift the short-run aggregate supply curve rightward.
If the economy is in short-run disequilibrium, an economist following classical theory would advocate that the Federal Reserve make appropriate changes in thea. money supply.b. reserve requirement.c. federal funds rate.d. None of these answers are correct.
Classical theory advocates policy, and Keynesian theory advocates policy.a. nonintervention; interventionb. active; nonstabilizationc. fixed wages; flexible wagesd. active; passive
When the Fed purchases government securities, ita. increases banks’ reserves and makes possible an increase in the money supply.b. decreases banks’ reserves and makes possible a decrease in the money supply.c. automatically raises the discount rate.d. uses discounting operations to influence
A bank currently has checkable deposits of$100,000, reserves of $30,000, and loans of$70,000. If the required reserve ratio is lowered from 20 percent to 15 percent, this bank can increase its loans bya. $10,000.b. $15,000.c. $75,000.d. $5,000.e. $0.
A bank faces a required reserve ratio of 5 percent.If the bank has $200 million of checkable deposits and $15 million of total reserves, then how large are the bank’s excess reserves?a. $0b. $5 millionc. $10 milliond. $15 million
Assume we have a simplified banking system in balance-sheet equilibrium. Also assume that all banks are subject to a uniform 10 percent reserve requirement and demand deposits are the only form of money. A commercial bank receiving a new demand deposit of $100 would be able to extend new loans in
The required reserve ratio for a bank is set bya. Congress.b. the bank itself.c. the Treasury Department.d. the banking system.e. the Federal Reserve.
In Exhibit 5, if the required reserve ratio is 20 percent for all banks and every bank in the banking system loans out all of its excess reserves, then a $10,000 deposit from Mr. Brown in checkable deposits could create for the entire banking systema. $8,000 worth of new money.b. $2,000 worth of
Which of the following actions by the Fed would increase the money supply?a. Reducing the required reserve ratiob. Selling government bonds in the open marketc. Increasing the discount rated. None of the above answers are correct.
The rate of interest charged by the Federal Reserve to member banks for reserves borrowed from the Fed is thea. federal funds rate.b. discount rate.c. repurchase rate.d. Q ceiling rate.
Which of the following policy actions by the Fed would cause the money supply to decrease?a. An open market purchase of government securitiesb. A decrease in required reserve ratiosc. An increase in the discount rated. A decrease in the discount rate
The cost to a member bank of borrowing from the Federal Reserve is thea. reserve requirement.b. price of securities in the open market.c. discount rate.d. yield on government bonds.
Decisions regarding purchases and sales of government securities by the Fed are made by thea. Federal Deposit Insurance Commission (FDIC).b. Discount Committee (DC).c. Federal Open Market Committee (FOMC).d. Federal Funds Committee (FFC).
If the required reserve ratio decreases, thea. money multiplier increases.b. money multiplier decreases.c. amount of excess reserves the bank has decreases.d. money multiplier stays the same.
Assume a simplified banking system subject to a 20 percent required reserve ratio. If there is an initial increase in excess reserves of $100,000, the money supplya. increases $100,000.b. increases $500,000.c. increases $600,000.d. decreases $500,000.
If the required reserve ratio is a uniform 25 percent on all deposits, the money multiplier will bea. 4.00.b. 2.50.c. 0.40.d. 0.25.
Assume a simplified banking system in which all banks are subject to a uniform reserve requirement of 20 percent and checkable deposits are the only form of money. A bank that received a new checkable deposit of $10,000 would be able to extend new loans up to a maximum ofa. $2,000.b. $8,000.c.
Which of the following appears on the asset side of a bank’s balance sheet?a. Excess reservesb. Loansc. Required reservesd. None of the above answers are correct.e. All of the above answers are correct.
Banks would be expected to minimize holding excess reserves because this practice isa. illegal.b. not profitable.c. technically difficult.d. subject to a stiff excess reserves tax.
Which of the following is not an interest bearing asset of commercial banks?a. Required reservesb. Securitiesc. Loansd. All of the above are interest bearing assets of commercial banks.
Which of the following does not appear on the asset side of a bank’s balance sheet?a. Required reservesb. Checkable depositsc. Loansd. Excess reserves
European banks began with which of the following?a. Monarchs were the first bankers, lending out cash to help the poor learn a craft.b. Churches were the first bankers, lending out cash to help the poor learn a craft.c. Goldsmiths were the first bankers, and the paper receipts they issued for gold
The Dodd-Frank Acta. was an attempt to deregulate the U.S. financial system.b. was passed in response to the Fed’s inability to adequately increase the money supply during the Great Depression.c. was an attempt to reign in risky bank behavior and to prevent a repeat of the crisis that led up to
The Federal Reserve System was founded ina. 1913.b. 1929.c. 1933.d. 1935.
Which of the following is a desirable property of money?a. Scarcityb. Portabilityc. Divisibilityd. All of the answers are correct.
The difference between M1 and M2 is explained by which of the following?a. M1 includes currency, coins, gold, and silver, but M2 does not contain gold and silver.b. M1 is made up of currency and checkable deposits, while M2 contains M1 plus savings deposits and small time deposits.c. M1 is limited
Which of the following is a store of value?a. Federal reserve notesb. Debit cardc. Passbook savings depositd. Each of the above answers is a store of value.
The Monetary Control Act of 1980a. created less competition among various financial institutions.b. allowed fewer institutions to offer checking account services.c. restricted savings and loan associations to long-term loans.d. extended the Fed’ authority to impose required reserve ratios on all
The major protection against a sudden mass attempt to withdraw cash from banks is thea. Federal Reserve.b. Consumer Protection Act.c. deposit insurance provided by the FDIC.d. gold and silver backing the dollar.
The Fed’s principal decision-making body, which directs the buying and selling of U.S. government securities, is known as thea. Federal Deposit Insurance Corporation.b. District Board of Governors.c. Federal Open Market Committee.d. Reserve Requirement Regulation Conference.
Which of the following is not part of the Federal Reserve System?a. Council of Economic Advisorsb. Board of Governorsc. Federal Open Market Committeed. 12 Federal Reserve District Banks
With respect to controlling the money supply, the law requires the Fed to take orders froma. the president.b. the Speaker of the House.c. the Secretary of the Treasury.d. no one—the Fed is an independent agency.
Which definition of the money supply includes credit cards?a. M1b. M2c. Both answers include credit card balances.d. Neither answer includes credit card balances.
Which of the following is counted as part of M2?a. Currencyb. Checkable deposits at commercial banksc. Money market fundsd. All of the answers are correct.
M1 money includes all but which of the following?a. Checkable depositsb. Savings accountsc. Paper moneyd. Coins
Which of the following statements is true?a. Money must be relatively “scarce” if it is to have value.b. Money must be divisible and portable.c. M1 is the narrowest definition of money.d. All of the answers are correct.
Which of the following items is included when computing M1?a. Coins in circulationb. Currency in circulationc. Checking accounting entriesd. All of the answers are correct.
The ease with which an asset can be converted into a medium of exchange is known asa. volatility.b. liquidity.c. currency.d. speculative exchange.
Anything can be money if it acts as aa. unit of account.b. store of value.c. medium of exchange.d. All of the answers are correct.
Which of the following items does not provide a store of value?a. Currencyb. Checkable depositsc. Credit cardsd. All of the answers are correct.
Comparing how many dollars it takes to attend college each year to annual earnings at a job represents the use of money as aa. medium of exchange.b. unit of account.c. store of value.d. store of coincidence.
Buying a cup of coffee with a dollar bill represents the use of money as aa. medium of exchange.b. unit of account.c. store of value.d. All of the answers are correct.
An increase in our federal government’s budget deficit will likelya. increase the national debt.b. increase interest rates.c. decrease borrowing by households and businesses.d. be less effective in stimulating the economy than the spending multiplier implies because of crowding out.e. do all of
The national debt is unlikely to cause national bankruptcy because thea. national debt can be refinanced by issuing new bonds.b. interest on the public debt equals GDP.c. national debt cannot be shifted to future generations for repayment.d. federal government cannot refinance the outstanding
When measured as a percentage of GDP, the U.S. national debt reached its highest levels as a result ofa. World War II.b. the Vietnam War.c. the Reagan defense buildup and tax cut.d. government efforts to address the economic challenges resulting from the COVID-19 pandemic.
With regard to the national debt, to whom does the federal government owe money?a. Taxpayersb. Federal government workersc. The Federal Reserve systemd. Investors who buy U.S. Treasury bills, bonds, and notes
If Congress fails to pass a budget before the fiscal year starts, federal agencies may continue to operate only if Congress has passed aa. balanced budget amendment.b. deficit reduction plan.c. debt ceiling reduction bill.d. continuing resolution.
“Crowding in” refers to federal government deficits thata. are used for public infrastructure and will offset at least some decline in business investment.b. reduce private business and consumption spending.c. reduce future rates of economic growth.d. All of the answers are correct.
The crowding-out effect can bea. zero.b. partial.c. complete.d. Any of the answers are correct.
“Crowding out” refers to the situation in whicha. borrowing by the federal government raises interest rates and causes firms to invest less.b. foreigners sell their bonds and purchase U.S.goods and services.c. borrowing by the federal government causes state and local governments to lower their
Which of the following U.S. Treasury securities represents ownership of the national debt?a. Bonds owned by the banks and insurance companiesb. Bonds owned by the Social Security Administrationc. Bonds owned by private individualsd. All of the above answers are correct.
In recent years, net interest on the national debt paid by the federal government as a percentage of GDP was equal to approximatelya. 2 percent.b. 6 percent.c. 16 percent.d. 25 percent.
The national debt is unlikely to cause national bankruptcy because the federal government cana. raise taxes.b. print money.c. refinance its debt.d. do all of the above.
Compared to Norway, the national debt as a percentage of GDP in the United States isa. smaller.b. the same.c. slightly larger.d. about 2.5 times larger.
Which of the following statements is true?a. Currently, the dollar amount of the national debt is about the same size as it was during World War II.b. The national debt increases in size whenever the federal government has a surplus budget.c. The dollar amount of the national debt decreased
Which of the following statements is false?a. The dollar amount of the national debt decreased steadily after World War II.b. The national debt increases in size whenever the federal government has a surplus budget.c. Currently, the dollar amount of the national debt is about the same size as it
Most of the U.S. national debt is owed to .Thus, a rising national debt implies that there will be a future redistribution of income and wealth in favor of .a. foreigners, foreignersb. other U.S. citizens, bondholdersc. foreigners, those needing government servicesd. other U.S. citizens, those
To finance a federal budget deficit, the U.S.Treasury borrows by sellinga. Treasury bills.b. Treasury notes.c. Treasury bonds.d. All of the above answers are correct.
The sum of past federal budget deficits is thea. GDP debt.b. trade debt plus GDP.c. national debt.d. Congressional debt.
Between 1998 and 2001, the federal budget wasa. never in surplus.b. in surplus about as often as it was in deficit.c. in surplus.d. never in deficit.
If the fiscal year begins without a budget and Congress fails to pass a continuing resolution, thena. the president has the right to raise the debt ceiling.b. federal agencies operate on the basis of the previous year’s budget.c. the interest rate paid on the national debt automatically
Each year, the president must submit a budget proposal to Congress bya. February.b. April.c. July.d. October.
According to the shortsightedness effect, politicians tend to favor projects witha. short-run benefits and short-run costs.b. short-run benefits and long-run costs.c. long-run benefits and short-run costs.d. long-run benefits and long-run costs.
If a person is taxed $100 on an income of$1,000, taxed $180 on an income of $2,000, and taxed $220 on an income of $3,000, this person is paying aa. progressive tax.b. poll tax.c. proportional tax.d. regressive tax.
“It would be an undue hardship to require people whose income is below $15,000 per year to pay income taxes.” This statement reflects which of the following principles for a tax?a. Benefits-receivedb. Inexpensive-to-collectc. Ability-to-payd. Fairness of contribution
Since 1929, total government taxes as a percentage of GDPa. climbed from about 10 percent to about 30 percent.b. remained close to 30 percent.c. climbed from about 30 percent to about 50 percent.d. climbed from about 15 percent to about 50 percent.
Which of the following categories accounted for the lowest percentage of total federal government expenditures in recent years?a. Income securityb. National defensec. Education and healthd. Interest on the national debt
Voters may choose to remain uninformed about an issue because ofa. the special-interest effect.b. rational ignorance.c. bureaucratic inefficiency.d. the shortsightedness effect.
People who often create benefits for the minority and impose the cost on the majority are calleda. fair-interest groups.b. encounter groups.c. laissez-faire groups.d. special-interest groups.
The study of the decision-making process of government is the study ofa. Keynesian economics.b. public choice theory.c. rational expectations theory.d. social economics.
In Exhibit 10, if A represents state and local taxes and B represents federal income taxes, what is the result of imposing both types of taxes?a. A regressive taxb. A progressive taxc. A proportional taxd. An ability-to-pay tax
In Exhibit 10, line C represents a (an)a. regressive tax.b. progressive tax.c. proportional tax.d. ability-to-pay tax.
In Exhibit 10, line B represents aa. regressive tax.b. progressive tax.c. proportional tax.d. flat tax.
In Exhibit 10, line A represents a (an)a. regressive tax.b. progressive tax.c. proportional tax.d. ability-to-pay tax.
A tax structured so that people with different incomes pay the same percentage of their income in taxes is called a (an)a. flat tax.b. regressive tax.c. progressive tax.d. excise tax.
Which of the following is an example of a progressive tax?a. The excise tax on cigarettesb. The federal tax on gasolinec. The federal personal income taxd. All of the above answers are correct.
A tax is regressive if it collects aa. larger amount as income rises.b. constant amount as income rises.c. smaller fraction of income as income falls.d. smaller fraction of income as income rises.
The benefits-received principle of taxation is most evident ina. progressive tax rates.b. excise taxes on gasoline.c. the personal income tax.d. the corporate income tax.
How do total taxes as a percentage of GDP in the United States compare to those of Western European countries, such as the United Kingdom, Germany, and Sweden?a. U.S. taxation is smaller.b. U.S. taxation is about the same.c. U.S. taxation is slightly larger.d. U.S. taxation is substantially larger.
Which of the following taxes contributed the greatest percentage of total federal government tax revenues in recent years?a. Individual income taxesb. Corporate income taxesc. Social Security taxesd. Excise taxes
Which of the following categories accounted for the largest percentage of total federal government expenditures in recent years?a. Income securityb. National defensec. Education and healthd. Interest on the national debt
Currently, total government expenditures in the United States are approximatelya. 37 percent of GDP.b. 50 percent of GDP.c. 75 percent of GDP.d. 80 percent of GDP.
Assume the economy is in recession and real GDP is below full employment. The marginal propensity to consume (MPC) is 0.75, and the government follows Keynesian economics by using expansionary fiscal policy to increase aggregate demand (total spending). If an increase of $1,000 billion in aggregate
When the government levies a $100 million tax on people’s income and puts the $100 million back into the economy in the form of a spending program, such as new interstate highway construction, thea. tax then generates a $100 million decline in real GDP.b. level of real GDP expands by $100
Assume the marginal propensity to consume(MPC) is 0.75 and the government increases taxes by $250 billion. The aggregate demand curve will shift to thea. left by $1,000 billion.b. right by $1,000 billion.c. left by $750 billion.d. right by $750 billion.
According to the Laffer curve, when the tax rate is 100 percent, tax revenue will bea. 0.b. at the maximum value.c. the same as it would be at a 50 percent tax rate.d. greater than it would be at a 50 percent tax rate.e. the same as it would be at a 20 percent tax rate.
The Laffer curve belongs to which of the following schools of economic thought?a. Keynesianb. Supply-sidec. Demand managementd. Classical
In Exhibit 13, supply-siders claim that a shift from AS1 to AS2 would occur if the governmenta. increased tax rates and increased the amount of government regulation.b. increased tax rates and decreased the amount of government regulation.c. decreased tax rates and increased the amount of
Supply-side economics calls fora. lower taxes on businesses and individuals.b. regulatory reforms to increase productivity.c. government subsidies to promote technological advance.d. All of the above answers are correct.
Showing 200 - 300
of 5010
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Last
Step by Step Answers
Get 50% OFF
Claim Now
