a. Say we are already suffering the long-run consequences of the policies of the remote or recent past. b. Advocate public or collective ownership and administration of the means of production and distribution of goods. c. Argue for more governmental stimulus to help the economy.
2. Would Henry Hazlitt more likely say: B
a. That government should fund public works to maintain full employment. b. The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups. c. From each according to his ability, to each according to his needs.
4. Changes in the quantity of money affect D
d.All of the above are correct
5.Which list ranks assets from most to least liquid? B
a.currency, fine art, stocks
b.currency, stocks, fine art
c.fine art, currency, stocks
d.fine art, stocks, currency
6.Fiat money A
a.has no intrinsic value.
b.is backed by gold.
c.has intrinsic value equal to its value in exchange.
d.is any close substitute for currency such as checkable deposits.
7.The agency responsible for regulating the money supply in the United States is C a.the Comptroller of the Currency.
b.the U.S. Treasury.
c.the Federal Reserve.
d.the U.S. Bank.
8.When the Federal Reserve conducts open-market operations to increase the money supply, it B a.redeems Federal Reserve notes.
b.buys government bonds from the public.
c.raises the discount rate.
d.decreases its lending to member banks.
9.Which of the following Fed actions would both increase the money supply? B a.buy bonds and raise the reserve requirement
b.buy bonds and lower the reserve requirement
c.sell bonds and raise the reserve requirement
d.sell bonds and lower the reserve requirement
10.Over the last 70 years the average annual U.S. inflation rate was about B a.1 percent.
a.increases the ability to pay debts and raises the value of money. b.increases the ability to pay debts and lowers the value of money. c.reduces the ability to pay debts and raises the value of money. d.reduces the ability to pay debts and lowers the value of money.
12.Open-market purchases by the Fed make the money supply B a.increase, which makes the value of money increase.
b.increase, which makes the value of money decrease.
c.decrease, which makes the value of money decrease.
d.decrease, which makes the value of money increase.
13.An associate professor of economics gets a $100 a month raise. She figures that with her current monthly salary she can't buy as many goods as she could last year. D a.Her real and nominal salary have risen.
b.Her real and nominal salary have fallen.
c.Her real salary has risen and her nominal salary has fallen. d.Her real salary has fallen and her nominal salary has risen.
14.When the Fed conducts open-market sales, B
a.it sells Treasury securities, which increases the money supply. b.it sells Treasury securities, which decreases the money supply. c.it borrows from member banks, which increases the money supply. d.it lends money to member banks, which decreases the money supply.
15.The Fed can influence unemployment in B
a.the short and long run.
b.the short run, but not the long run.
c.the long run, but not the short run.
d.neither the short nor long run.
16.In a 100-percent-reserve banking system, D
a.banks can create money by issuing currency.
b.banks can create money by lending out reserves.
c.the Fed can increase the money supply with open-market sales. d.banks hold as many reserves as they hold deposits.
17.Suppose that the reserve...