ECON 110 Exam 3 Questions With Correct
Answers
The |three |tools |of |monetary |policy |are |open |market |operations, |setting |prices, |and |setting |the
|velocity |of |money |- |CORRECT |ANSWER✔✔-False
A |decrease |in |the |federal |funds |rate |is |an |indication |that |monetary |policy |is |expansionary |- |
CORRECT |ANSWER✔✔-True
The |difference |between |a |standard |and |an |Inverted |yield |curve |is |that |when |the |yield |curve |is |
inverted, |the |longer-term |bond |pays |a |lower |interest |rate |than |a |short-term |bond. |- |CORRECT |
ANSWER✔✔-True
Other |things |equal, |the |higher |the |reservation |wage, |the |more |likely |one |is |to |be |unemployed
|- |CORRECT |ANSWER✔✔-True
Someone |who |believes |in |the |social |responsibility |framework |believes |that |the |standard |
measure |of |unemployment |underestimates |the |level |of |unemployment. |- |CORRECT |
ANSWER✔✔-True
The |duration |of |unemployment |rose |significantly |more |during |the |2008/09 |recession |relative |
to |previous |recessions |- |CORRECT |ANSWER✔✔-True
The |prices |of |assets |are |included |in |standard |measures |of |inflation |- |CORRECT |ANSWER✔✔-
True
, Inflation |redistributes |income |from |people |who |do |not |raise |their |prices |to |people |who |do |
raise |their |prices |- |CORRECT |ANSWER✔✔-True
Expectations |of |inflation |are |assumed |to |be |constant |at |each |point |on |a |given |short-run |
phillips |curve |- |CORRECT |ANSWER✔✔-True
The |long-run |Philips |curve |shifts |to |the |left |or |the |right |as |expectations |of |inflation |change |- |
CORRECT |ANSWER✔✔-False
Which |of |the |following |is |the |path |through |which |confectionary |monetary |policy |works? |- |
CORRECT |ANSWER✔✔-Money |down |implies |interest |rate |up |implies |investment |down |implies |
income |down
If |prices |are |inflexible, |monetary |policy: |- |CORRECT |ANSWER✔✔-Affects |both |nominal |and |
real |income
If |nominal |income |increased |by |3 |percent |and |real |income |increases |by |4 |percent, |the |price |
level |must: |- |CORRECT |ANSWER✔✔-decrease |by |1 |percent
Monetary |policy |that |shifts |the |AD |curve |from |AD0 |to |AD1 |and |moves |the |economy |from |A |to
|B: |(GRAPH |PICTURED) |- |CORRECT |ANSWER✔✔-Increases |both |real |and |nominal |output |in |the |
short |run
In |the |AS/AD |model, |a |contractionary |monetary |policy: |- |CORRECT |ANSWER✔✔-reduces |both |
investment |and |aggregate |demand
Fed |watchers |are: |- |CORRECT |ANSWER✔✔-Individuals |or |organizations |whose |sole |occupation |
is |to |follow |the |fed's |FOMC
How |many |regional |banks |are |in |the |Federal |Reserve |System? |- |CORRECT |ANSWER✔✔-12
Answers
The |three |tools |of |monetary |policy |are |open |market |operations, |setting |prices, |and |setting |the
|velocity |of |money |- |CORRECT |ANSWER✔✔-False
A |decrease |in |the |federal |funds |rate |is |an |indication |that |monetary |policy |is |expansionary |- |
CORRECT |ANSWER✔✔-True
The |difference |between |a |standard |and |an |Inverted |yield |curve |is |that |when |the |yield |curve |is |
inverted, |the |longer-term |bond |pays |a |lower |interest |rate |than |a |short-term |bond. |- |CORRECT |
ANSWER✔✔-True
Other |things |equal, |the |higher |the |reservation |wage, |the |more |likely |one |is |to |be |unemployed
|- |CORRECT |ANSWER✔✔-True
Someone |who |believes |in |the |social |responsibility |framework |believes |that |the |standard |
measure |of |unemployment |underestimates |the |level |of |unemployment. |- |CORRECT |
ANSWER✔✔-True
The |duration |of |unemployment |rose |significantly |more |during |the |2008/09 |recession |relative |
to |previous |recessions |- |CORRECT |ANSWER✔✔-True
The |prices |of |assets |are |included |in |standard |measures |of |inflation |- |CORRECT |ANSWER✔✔-
True
, Inflation |redistributes |income |from |people |who |do |not |raise |their |prices |to |people |who |do |
raise |their |prices |- |CORRECT |ANSWER✔✔-True
Expectations |of |inflation |are |assumed |to |be |constant |at |each |point |on |a |given |short-run |
phillips |curve |- |CORRECT |ANSWER✔✔-True
The |long-run |Philips |curve |shifts |to |the |left |or |the |right |as |expectations |of |inflation |change |- |
CORRECT |ANSWER✔✔-False
Which |of |the |following |is |the |path |through |which |confectionary |monetary |policy |works? |- |
CORRECT |ANSWER✔✔-Money |down |implies |interest |rate |up |implies |investment |down |implies |
income |down
If |prices |are |inflexible, |monetary |policy: |- |CORRECT |ANSWER✔✔-Affects |both |nominal |and |
real |income
If |nominal |income |increased |by |3 |percent |and |real |income |increases |by |4 |percent, |the |price |
level |must: |- |CORRECT |ANSWER✔✔-decrease |by |1 |percent
Monetary |policy |that |shifts |the |AD |curve |from |AD0 |to |AD1 |and |moves |the |economy |from |A |to
|B: |(GRAPH |PICTURED) |- |CORRECT |ANSWER✔✔-Increases |both |real |and |nominal |output |in |the |
short |run
In |the |AS/AD |model, |a |contractionary |monetary |policy: |- |CORRECT |ANSWER✔✔-reduces |both |
investment |and |aggregate |demand
Fed |watchers |are: |- |CORRECT |ANSWER✔✔-Individuals |or |organizations |whose |sole |occupation |
is |to |follow |the |fed's |FOMC
How |many |regional |banks |are |in |the |Federal |Reserve |System? |- |CORRECT |ANSWER✔✔-12
