Econ 101 - Final Exam 2023 Graded A Latest Version 2Oo Questions And Answers

Econ 101 - Final Exam 2023 GRADED A LATEST VERSION 2OO QUESTIONS AND ANSWERS Which of the following is a role played by the Fed in the U.S. economy? A) It acts as a lender of the last resort in case of bank runs. B) It takes political decisions during periods of recessions. C) It determines the import duty on raw materials being imported into the country. D) It acts as a direct source of funds for new businesses and startups. - CORRECT ANSWER A) It acts as a lender of the last resort in case of bank runs. ________ money refers to something that is used as money but that is otherwise worthless and typically has the backing of the government or a central bank. - CORRECT ANSWER Fiat Which of the following equations is correct? A) Real interest rate = Nominal interest rate × Inflation rate B) Real interest rate = Nominal interest rate / Inflation rate C) Real interest rate = Nominal interest rate - Inflation rate D) Real interest rate = Nominal interest rate + Inflation rate - CORRECT ANSWER C) Real interest rate = Nominal interest rate - Inflation rate If the annual inflation rate in an economy is pi , then $1 borrowed at the beginning of a year will have the same purchasing power as ________ dollars at the end of the year. - CORRECT ANSWER (1 + pi) The two key objectives of the Fed are: - CORRECT ANSWER low and predictable levels of inflation, and maximum levels of employment. One of the risks of maturity transformation is that: - CORRECT ANSWER it can lead to bank runs