Economics 2301 Final Exam 2023-TXST Sherwood Bishop(Solved correctly)
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Economics 2301
Economics 2301 Final Exam 2023-TXST Sherwood Bishop(Solved correctly)
What term is given to something that serves as a way of preserving economic value that can be spent or consumed in the future?
A. Medium of exchange
B. Unit of account
C. Store of value
D. Money market funds
Store of Valu...
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Economics 2301 Final Exam 2023-TXST Sherwood
Bishop(Solved correctly)
What term is given to something that serves as a way of preserving economic
value that can be spent or consumed in the future?
A. Medium of exchange
B. Unit of account
C. Store of value
D. Money market funds
Store of Value
What is meant by "store of value"?
A. A definition of the money supply that includes currency, traveler's checks, and
checking accounts in banks.
B. Something that serves as a way of preserving economic value that can be
spent or consumed in the future.
C. A bank's liabilities can be withdrawn in the short term while its assets are
repaid in the long term.
D. Trading one good or service for another directly, without using money.
Something that serves as a way of preserving economic value that can be spent or
consumed in the future.
Which of the following characteristics relate to money?
A. Whatever serves society in three functions: medium of exchange, unit of
account, and store of value.
B. An accounting tool that lists assets and liabilities.
C. Whatever is widely accepted as a method of payment.
D. Funds that a bank keeps on hand and that are not loaned out or invested in
bonds.
Whatever serves society in three functions: Medium of exchange, unit of account, and
store of value
What name is given to coins and paper bills?
A. Reserves
B. Unit of account
C. Currency
D. Store of value
Currency
What is meant by "demand deposits"?
A.An institution that operates between a saver with financial assets to invest and
an entity who will receive those assets and pay a rate of return.
B. Deposits in banks that are available by making a cash withdrawal or writing a
check.
C. A bank's liabilities can be withdrawn in the short term while its assets are
repaid in the long term.
D.Bank accounts where you can't withdraw money by writing a check, but can
withdraw the money at a bank-or can transfer it easily to a checking account.
Deposits in banks that are available by making a cash withdrawal or writing a check
,Which of the following refers to a definition of the money supply that includes
currency, traveler's checks, and checking accounts in banks?
A. M1
B. Money market funds
C. M2
D. Bond
M1
What name is given to a definition of the money supply that includes currency,
traveler's checks, checking accounts in banks, savings deposits, money market
funds, and certificates of deposit?
A.M1
B.Reserves
C.Store of value
D.M2
M2
Which of the following is a valid criticism of the use of money as a store of value
in modern economies?
A. imperfect as a unit of account
B. storing money is wasteful
C. money supply is too narrowly defined
D. annual inflationary loss of buying power
Imperfect as a unit of account
Banks can protect themselves against an unexpectedly high rate of loan defaults
and against the risk of ____________________ by adopting a strategy that will
_____________.
A. rising interest rates; diversify its loans
B. an increased reserve requirement; provide loans to a variety of customers
C. an asset-liability time mismatch; diversify its loans
D. rising interest rates; provide loans to a variety of customers
An asset-liability mismatch; diversify its loans
When governments are borrowers in financial capital markets, which of the
following is least likely to be a possible source of the funds from a
macroeconomic point of view?
A.decrease in borrowing by private firms
B.increase in household savings
C.foreign financial investors
D.central bank prints more money
Central banks prints more money
When government policy moves from a budget deficit to a budget surplus and the
trade deficit remains constant
A. savings will decrease, no matter what happens to investment.
B. investment will decrease if savings remain constant.
C. investment will increase if savings remain constant.
D. savings will increase if investment remains constant.
investment will increase if savings remain constant.
, What is meant by excess reserves?
A. A monetary policy that reduces the supply of money and loans.
B. The proportion of its reserves that a bank is legally required to deposit with the
central bank.
C. Reserves that banks hold above the legally mandated limit.
D. A rule that the central bank is required to focus only on keeping inflation low.
C. Reserves that banks hold above the legally mandated limit.
What is meant by open market operations?
A. The central bank buying or selling bonds to influence the quantity of money
and the level of interest rates.
B. Reserves that banks hold above the legally mandated limit.
C. A monetary policy that increases the supply of money and the quantity of
loans.
D. When depositors race to the bank to withdraw their deposits for fear that
otherwise they would be lost.
A. The central bank buying or selling bonds to influence the quantity of money and the
level of interest rates.
An increase in government borrowing can
A. cause a substantial decrease in interest rates.
B. crowd out private investment in physical capital.
C. allow private investment to expand.
D. increase the incentive to invest in technology.
B. crowd out private investment in physical capital.
A __________________ often results in an outflow of financial capital leaving the
domestic economy and being invested in the global economy?
A. fiscal deficit
B. trade surplus
C. trade deficit
D. twin surplus
Trade Surplus
When inflation begins to climb to unacceptable levels in the economy, the
government should
A. use contractionary fiscal policy to shift aggregate demand to the right.
B. use expansionary fiscal policy to shift aggregate demand to the right.
C. use expansionary fiscal policy to shift aggregate demand to the left.
D. use contractionary fiscal policy to shift aggregate demand to the left.
A. use contractionary fiscal policy to shift aggregate demand to the right.
What is meant by government debt?
A. Economic policies that involve government spending and taxes.
B. When the federal government spends more than it collects in taxes in a given
year.
C. The total accumulated amount that the government has borrowed and not yet
paid back over time.
D. A monetary policy that decreases the supply of money and the quantity of
loans.
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