ECN 211 Final Exam review Questions With Solutions

ECN 211 Final Exam review Questions With Solutions entails the exchange of goods for goods - ANS Barter all the possible combinations of two goods that can be purchased, given money income and the prices of the goods - ANS The budget line shows? leftward shift in the economy's aggregate demand curve - ANS A contractionary fiscal policy is shown as a: Their face value is greater than their intrinsic value - ANS To say that coins are "token money" means that: Cause and effect chain of an expansionary monetary policy - ANS An increase in the money supply will lower the interest rate, increase investment spending and increase aggregate demand and GDP... this is an example of Medium of exchange - ANS the transaction demand for money is most closely related to money functioning as a Difference between actual reserves and required reserves - ANS excess reserves refer to the excess reserves - ANS The amount that a commercial bank can lend is determined by its the governments ability to control the supply of money and therefore to keep its value relatively stable - ANS The money supply is back by: -Store value -unit of account -medium of exchange - ANS Money functions as a Increasing government spending by 4 billion - ANS If the MPS in an economy is .1, government could shift the aggregate demand curve rightward by $40 billion by Budget deficit - ANS the amount by which government expenditures exceed revenues during a particular year is the Discount rate - ANS the interest rate at which the Federal Reserve banks lend to commercial banks is called the Federal Open market committee (FOMC) - ANS The group that sets the federal reserves system policy on buying and selling government securities (bills, notes, and bonds) is the :