ECN 211 EXAM QUESTIONS AND ANSWERS ALL CORRECT 2024/2025 UPDATE
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Course
ECN 211
Institution
ECN 211
ECN 211 EXAM QUESTIONS AND ANSWERS ALL CORRECT 2024/2025 UPDATE
In the wake of the Great Recession The American Recovery and Reinvestment Act of 2009 was passed and the federal government made funds available for infrastructure investments. Which of the following best describes this part of the...
ECN 211 EXAM QUESTIONS AND
ANSWERS ALL CORRECT
2024/2025 UPDATE
In the wake of the Great Recession The American Recovery and Reinvestment Act of
2009 was passed and the federal government made funds available for infrastructure
investments. Which of the following best describes this part of the ARRA? - Answer-
Deficit spending
If the government wished to stimulate demand for goods in the economy by demanding
many goods itself, which of the following policies most closely match this goal. -
Answer- Increase government purchases
A strong advocate of Pigouvian taxation would most likely believe that........ - Answer-
The market outcome is inherently inefficient
Complete the following sentence. Tax cuts will be more effective in increasing overall
spending and when the marginal propensity to consume of the recipients of these tax
cuts is _______. - Answer- high
Choose the correct definition for the term: Spending (or fiscal) multiplier - Answer- The
ratio of the change in GDP to a change in government spending. Increased government
spending becomes income for people within the economy, who then spend it again to
continue the cycle.
Which of the following are functions of money that were discussed in the learning
object? - Answer- Unit of account
Store of value
Medium of exchange
Which of the following would be an example of money functioning as a unit of account?
- Answer- Kyle is looking to buy a pair of shoes, he goes to a number of cobblers in
town asking to see the shoes they make. Because his town recently adopted a uniform
currency, Kyle is able to easily discern the cost of each shoe compared to the other.
Which of the following would be an example of money functioning as a medium of
exchange? - Answer- Last year Kyle was unable to buy shoes because all he has as a
means of payment were eggs from his farm, and none of the cobblers in town had any
need for eggs. This year with the adoption of the towns new currency he is able to
, purchase shoes because the cobblers are willing to accept money as a means of
payment due to the fact that they can use it to purchase whatever they please.
Which of the following currencies are examples of a commodity currency? - Answer-
Cowrie shells
Cocoa beans
Which of the following currencies are examples of a commodity based currency? -
Answer- Currency that is redeemable for a specified amount of gold
Which of the following currencies are examples of a fiat currency? - Answer- The
current US dollar
Euros
True or false, although it has changed slightly, the United States has always had a
nationwide currency since its inception. - Answer- False
Who established the First Bank of the United States. - Answer- Alexander Hamilton
Which ones are aimed at directly increasing households' disposable income - Answer-
tax cuts
increased transfer payments
By looking at the data chart above does government spending as a percent of GDP in
the United States seem to be countercyclical, procyclical, or acyclical? - Answer-
countercyclical
Which of the following are benefits of holding money? - Answer- Holding money allows
for the purchases of goods without incurring any transaction costs.
Holding money has an extreme low risk of loss.
Which of the following does the letter A represent in the exhibit above? - Answer- Price
level
Which of the following statements correctly characterizes the two main assumptions
monetarists make. - Answer- The money supply has no effect on GDP and the velocity
of money is constant.
Which of the following was mentioned in the learning object as the most common way of
preventing hyperinflationary spirals like the ones we saw in post-WW1 Germany and in
Zimbabwe. - Answer- Separating the power of fiscal policy and the power of printing
money.
How frequently did prices double in Brazil during the peak of the hyperinflation? -
Answer- Once every two months.
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