Natalie Balzert
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ECON 103 Quiz on Econ 103 Final Exam Practice, created by Natalie Balzert on 12/12/2016.

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Natalie Balzert
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Econ 103 Final Exam Practice

Question 1 of 60

1

To use monetary policy to lessen the effects of a recession, the Federal Reserve would:

Select one of the following:

  • increase the money supply and increase interest rates

  • decrease the money supply and increase interest rates

  • increase the money supply and decrease interest rates

  • decrease the money supply and decrease interest rates

Explanation

Question 2 of 60

1

Federal Reserve Notes in the Us are:

Select one of the following:

  • commodity money

  • fiat money

  • specie money

  • regulated money

Explanation

Question 3 of 60

1

When the USA was founded, the official monetary system was based on:

Select one of the following:

  • gold and silver

  • silver only

  • gold only

  • gold, silver, and/or paper as determined by Congress

Explanation

Question 4 of 60

1

Prior to the Civil War, US banks could print paper money, the government could not.

Select one of the following:

  • True
  • False

Explanation

Question 5 of 60

1

Some countries in Central America, South America, and Africa use the US dollar their currency and no longer print their own,

Select one of the following:

  • True
  • False

Explanation

Question 6 of 60

1

Fill the blank space to complete the text.

It is called a if a country issues its money backed by dollars or yen.

Explanation

Question 7 of 60

1

Which of the following is not one of the functions of money?

Select one of the following:

  • medium of exchange

  • insurer of commodities

  • store of value

  • unit of account

Explanation

Question 8 of 60

1

When David Hume said that money was the oil of trade, he meant which function of money?

Select one of the following:

  • Medium of exchange

  • Insurer of commodities

  • Store of valie

  • Unite of Account

Explanation

Question 9 of 60

1

Fill the blank space to complete the text.

An economic system without money is a system.

Explanation

Question 10 of 60

1

In the book the Wonderful Wizard of Oz, the author supports:

Select one of the following:

  • bimetallism

  • the gold standard

  • fiat money

  • reserve currencies

Explanation

Question 11 of 60

1

Which of the following is false about the Wonderful Wizard of Oz?

Select one of the following:

  • The yellow brick road is the gold standard

  • The scarecrow represents farmers

  • Dorothy's slippers are made of silver in the original story

  • The tin woodsman represents Wall Street

Explanation

Question 12 of 60

1

The Wonderful Wizard of Oz is about the presidential election of 1896.

Select one of the following:

  • True
  • False

Explanation

Question 13 of 60

1

In the Wonderful Wizard of Oz the wizard is the president of the US.

Select one of the following:

  • True
  • False

Explanation

Question 14 of 60

1

In a fractional reserve banking system, banks must keep:

Select one of the following:

  • a % of their of their loans on reserve in the bank

  • a % of their deposits on reserve in the bank

  • a set dollar amount on reserve in the bank, based on their size

  • a percentage of their average daily transactions on reserve in the bank

Explanation

Question 15 of 60

1

The Federal Reserve was founded in 1913. It is the first central bank the US has ever had, while most of the central banks in Europe are hundreds of years old.

Select one of the following:

  • True
  • False

Explanation

Question 16 of 60

1

The Fed is divided into Districts because:

Select one of the following:

  • it is more efficient to issue currency that way due to the size of the country

  • separate districts can better adapt to local economic conditions

  • too many states wanted the Fed located there, so having 12 was a political compromise

  • Katniss Everdeen decided

Explanation

Question 17 of 60

1

Fill the blank space to complete the text.

In today's financial system, the value of our money depends only on our in it, according to your professor.

Explanation

Question 18 of 60

1

Fill the blank space to complete the text.

The Fed decreases the money supply by bonds.

Explanation

Question 19 of 60

1

The Federal Reserve is intended to be independent of the President and Congress.

Select one of the following:

  • True
  • False

Explanation

Question 20 of 60

1

When the Fed increases the money supply, interest rates should:

Select one of the following:

  • fall

  • rise

  • remain inchanged

Explanation

Question 21 of 60

1

Fill the blank space to complete the text.

The rate is what the Fed charges banks when they borrow from it.

Explanation

Question 22 of 60

1

Fill the blank space to complete the text.

The rate is what US banks are charged for overnight loans.

Explanation

Question 23 of 60

1

Fill the blank space to complete the text.

The is the European version of the previous question.

Explanation

Question 24 of 60

1

Most of the money in the world is:

Select one of the following:

  • cash printed by the government

  • created by banks when they make loans

  • created through printing bonds

  • created by banks taking deposits

Explanation

Question 25 of 60

1

A credit default swap is actually an insurance policy on a financial asset.

Select one of the following:

  • True
  • False

Explanation

Question 26 of 60

1

M1 is mainly:

Select one of the following:

  • cash and coins

  • currency and checking accounts

  • currency, checking accounts, and small savings and time deposits

  • a freeway in London

Explanation

Question 27 of 60

1

If Bill's bank is the only bank, it can legally make a loan of $50000. That is, it's accounts will still balance legally after the loan is made.

Select one of the following:

  • True
  • False

Explanation

Question 28 of 60

1

When the interest rate rises, investment should do what?

Select one of the following:

  • rise

  • fall

  • be unchanged

Explanation

Question 29 of 60

1

The modern theory of economic growth is based on _____ as the key to growth.

Select one of the following:

  • savings

  • ideas and innovations

  • infrastructure investment

  • banking reform

Explanation

Question 30 of 60

1

The size of a country's _____ relative to its population tells us how rich it is.

Select one of the following:

  • bank reserves

  • capital stock

  • financial markets

  • exports

Explanation

Question 31 of 60

1

According to the United Nations, what is the biggest obstacle to economic development for poor nations in the world today?

Select one of the following:

  • too much debt

  • treatment of women

  • child labor

  • poor transportation systems

Explanation

Question 32 of 60

1

Despite the theories, the quantity of natural resources a country has turns out to be the most important factor to its economic growth in the real world.

Select one of the following:

  • True
  • False

Explanation

Question 33 of 60

1

When the government uses its taxing and spending powers to affect the economy, it is called:

Select one of the following:

  • monetary policy

  • congressional policy

  • financial policy

  • fiscal policy

Explanation

Question 34 of 60

1

Open Market operations are

Select one of the following:

  • the buying and selling of government bonds by the Federal Reserve

  • the means by which the Federal Reserve acts as the government's banker

  • the buying and selling of Federal Reserve Notes in the open market

  • the buying and selling of government bonds by the Treasury

Explanation

Question 35 of 60

1

When the government of Japan targeted its automobile companies as a way to make the economy grow, this was called _____ policy.

Select one of the following:

  • fiscal

  • regional

  • industrial

  • referntial

Explanation

Question 36 of 60

1

In the current economic crisis, a Classical economist would have done what with the failing banks and insurance companies?

Select one of the following:

  • let them go bankrupt, regardless of effect on anything else

  • let them go bankrupt, with the Fed protecting other financial institutions affected by it

  • forced another financial institution to buy them, with help from the Fed

  • exactly what the Fed did, buy billions in their stock to increase their reserves

Explanation

Question 37 of 60

1

Keynesians believe that the best way to end a recession is:

Select one of the following:

  • increase the money supply and lower interest rates

  • increase government spending and make tax cuts

  • raise interest rates and cut taxes

  • do nothing

Explanation

Question 38 of 60

1

When lowering interest rates dows not affect the economy, economists say we are in a(n):

Select one of the following:

  • functional deficit

  • liquidity trap

  • crowding out

  • transitional lag

Explanation

Question 39 of 60

1

Correctly measured the US national debt:

Select one of the following:

  • is larger than it has ever been

  • has increased under every president since 1900, except Clinton

  • is smaller than Japan's

  • b and c only

  • a,b, and c are all correct

Explanation

Question 40 of 60

1

The last US president who did not have a budget deficit was:

Select one of the following:

  • Reagan

  • Kennedy

  • Jackson

  • Clinton

Explanation

Question 41 of 60

1

Almost all money in the world today is _____ money

Select one of the following:

  • commodity

  • fiat

  • industrial

  • contractual

Explanation

Question 42 of 60

1

Fill the blank space to complete the text.

An economic system without money is a(n) system.

Explanation

Question 43 of 60

1

Fill the blank space to complete the text.

The central bank increases the money supply by bonds.

Explanation

Question 44 of 60

1

The Fed is divided into 12 districts which are supposed to:

Select one of the following:

  • simplify the Fed's accounting

  • each contain 1/12 of the population, creating a monetary "congress"

  • represent the unique economic interests of different parts of the country

  • all members of congress to appoint those who their local economy

Explanation

Question 45 of 60

1

Most of the money is the world is:

Select one of the following:

  • cash printed by the government

  • created by banks when they make loans

  • created through printing bonds

  • created by banks taking deposits

Explanation

Question 46 of 60

1

The entity intended to be the central bank for the world is the:

Select one of the following:

  • ECB

  • IMF

  • World Bank

  • Wynn Resorts

Explanation

Question 47 of 60

1

When the entity in the previous question make a loan to a country, it requires a(n) _____ program in exchange

Select one of the following:

  • re-invigoration

  • austerity

  • spending

Explanation

Question 48 of 60

1

The changes made to US currency have been made to:

Select one of the following:

  • lengthen the time the money is used in circulation

  • prevent couterfeiting

  • lower the costs of printing

  • b and c

Explanation

Question 49 of 60

1

Fill the blank spaces to complete the text.

M2 consists of the , , and .

Explanation

Question 50 of 60

1

Fill the blank space to complete the text.

The Act separated banking and stock brokers. It has since been repealed.

Explanation

Question 51 of 60

1

Congress in 1999 passed a law which prohibited the government from creating rules that regulated mortgage backed securities.

Select one of the following:

  • True
  • False

Explanation

Question 52 of 60

1

Fill the blank space to complete the text.

When lowering interest rates does not affect the economy, economists say that we are in a(n) .

Explanation

Question 53 of 60

1

Fill the blank space to complete the text.

It is called when the government's borrowing to pay for something like the stimulus package makes interest rates go up, and lessons private borrowing.

Explanation

Question 54 of 60

1

Data tell us that changing taxes has the strongest effect on the economy when times are good, and less effect as times go bad.

Select one of the following:

  • True
  • False

Explanation

Question 55 of 60

1

Banks in the US in the 1800s were generally allowed to print their own money.

Select one of the following:

  • True
  • False

Explanation

Question 56 of 60

1

Fill the blank space to complete the text.

The approval that a bank must have to be allowed to operate is called a(n) .

Explanation

Question 57 of 60

1

Bill's Bank has $5,000 in cash, $10,000 in loans, and $40,000 in deposits. Its actual reserves are:

Select one of the following:

  • $10,000

  • $4,000

  • $40,000

  • $5,000

Explanation

Question 58 of 60

1

Bill's Bank has $5,000 in cash, $10,000 in loans, and $40,000 in deposits. It requires reserves, assuming 10% reserve requirement, are:

Select one of the following:

  • $4,000

  • $1,000

  • $10,000

Explanation

Question 59 of 60

1

Bill's Bank has $5,000 in cash, $10,000 in loans, and $40,000 in deposits. Its excess reserves, assuming 10% reserve requirement, are:

Select one of the following:

  • $0

  • $2,000

  • $1,000

Explanation

Question 60 of 60

1

Bill's Bank has $5,000 in cash, $10,000 in loans, and $40,000 in deposits. It can make a $5,000 loan and remain legal, assuming a 10% reserve requirement.

Select one of the following:

  • True
  • False

Explanation