WWU Econ 101 First Test Questions with Accurate
Answers
1. _____________ is the central bank of the United States.
Ans✓✓✓ The Federal Reserve
2. America is a _________ System.
Ans✓✓✓ Hybrid
3. Asset Demand (M_DA)
Ans✓✓✓ The demand for money to be saved for future use. - Changes based on the interest
rate. - Line decreases.
4. Banking Act of 1933: Glass-Steagall
Ans✓✓✓ Separated commercial banking from investment banking and created the Federal
Deposit Insurance Corporation.
5. Banking Supervision
Ans✓✓✓ - Supervise Member Banks - Identify banks in trouble and avoid a run on the bank -
Create regulations to promote a stable banking system
6. Causation
Ans✓✓✓ Implies that a change in one variable causes the other variable to change. - Implies
that there is a direct relationship between the two variables (Typically holds in Theory.)
7. Correlation
Ans✓✓✓ A quality measuring the statistical interdependence between two variables.
8. Demand for money comes from:
Ans✓✓✓ - Transaction Demand (M_DT) - Asset Demand (M_DA)
9. Discount Rate
Ans✓✓✓ The interest rate at which banks can borrow money directly from the Federal
Reserve.
10. Double Coincidence of Wants
Ans✓✓✓ When two people have goods they are both happy to exchange for other goods.
,11. Fallacy of Composition
Ans✓✓✓ When one infers that something is true of the whole from the fact that it is true for a
part of the whole.
12. Federal Open Market Committee
Ans✓✓✓ The policy-making body of the Federal Reserve. Comprised of the Board of
Governors and 5 Federal Reserve district bank presidents.
13. Federal Reserve activities
Ans✓✓✓ - Monetary Policy - Banking Supervision - Financial Services
14. _____________ is the central bank of the United States.
Ans✓✓✓ The Federal Reserve
15. America is a _________ System.
Ans✓✓✓ Hybrid
16. Asset Demand (M_DA)
Ans✓✓✓ The demand for money to be saved for future use. - Changes based on the interest
rate. - Line decreases.
17. Banking Act of 1933: Glass-Steagall
Ans✓✓✓ Separated commercial banking from investment banking and created the Federal
Deposit Insurance Corporation.
18. Banking Supervision
Ans✓✓✓ - Supervise Member Banks - Identify banks in trouble and avoid a run on the bank -
Create regulations to promote a stable banking system
19. Causation
Ans✓✓✓ Implies that a change in one variable causes the other variable to change. - Implies
that there is a direct relationship between the two variables (Typically holds in Theory.)
20. Correlation
Ans✓✓✓ A quality measuring the statistical interdependence between two variables.
21. Demand for money comes from:
Ans✓✓✓ - Transaction Demand (M_DT) - Asset Demand (M_DA)
,22. Discount Rate
Ans✓✓✓ The interest rate at which banks can borrow money directly from the Federal
Reserve.
23. Double Coincidence of Wants
Ans✓✓✓ When two people have goods they are both happy to exchange for other goods.
24. Fallacy of Composition
Ans✓✓✓ When one infers that something is true of the whole from the fact that it is true for a
part of the whole.
25. Federal Open Market Committee
Ans✓✓✓ The policy-making body of the Federal Reserve. Comprised of the Board of
Governors and 5 Federal Reserve district bank presidents.
26. Federal Reserve activities
Ans✓✓✓ - Monetary Policy - Banking Supervision - Financial Services
27. _____________ is the central bank of the United States.
Ans✓✓✓ The Federal Reserve
28. America is a _________ System.
Ans✓✓✓ Hybrid
29. Asset Demand (M_DA)
Ans✓✓✓ The demand for money to be saved for future use. - Changes based on the interest
rate. - Line decreases.
30. Banking Act of 1933: Glass-Steagall
Ans✓✓✓ Separated commercial banking from investment banking and created the Federal
Deposit Insurance Corporation.
31. Banking Supervision
Ans✓✓✓ - Supervise Member Banks - Identify banks in trouble and avoid a run on the bank -
Create regulations to promote a stable banking system
32. Causation
, Ans✓✓✓ Implies that a change in one variable causes the other variable to change. - Implies
that there is a direct relationship between the two variables (Typically holds in Theory.)
33. Correlation
Ans✓✓✓ A quality measuring the statistical interdependence between two variables.
34. Demand for money comes from:
Ans✓✓✓ - Transaction Demand (M_DT) - Asset Demand (M_DA)
35. Discount Rate
Ans✓✓✓ The interest rate at which banks can borrow money directly from the Federal
Reserve.
36. Double Coincidence of Wants
Ans✓✓✓ When two people have goods they are both happy to exchange for other goods.
37. Fallacy of Composition
Ans✓✓✓ When one infers that something is true of the whole from the fact that it is true for a
part of the whole.
38. Federal Open Market Committee
Ans✓✓✓ The policy-making body of the Federal Reserve. Comprised of the Board of
Governors and 5 Federal Reserve district bank presidents.
39. Federal Reserve activities
Ans✓✓✓ - Monetary Policy - Banking Supervision - Financial Services
40. _____________ is the central bank of the United States.
Ans✓✓✓ The Federal Reserve
41. America is a _________ System.
Ans✓✓✓ Hybrid
42. Asset Demand (M_DA)
Ans✓✓✓ The demand for money to be saved for future use. - Changes based on the interest
rate. - Line decreases.
43. Banking Act of 1933: Glass-Steagall
Answers
1. _____________ is the central bank of the United States.
Ans✓✓✓ The Federal Reserve
2. America is a _________ System.
Ans✓✓✓ Hybrid
3. Asset Demand (M_DA)
Ans✓✓✓ The demand for money to be saved for future use. - Changes based on the interest
rate. - Line decreases.
4. Banking Act of 1933: Glass-Steagall
Ans✓✓✓ Separated commercial banking from investment banking and created the Federal
Deposit Insurance Corporation.
5. Banking Supervision
Ans✓✓✓ - Supervise Member Banks - Identify banks in trouble and avoid a run on the bank -
Create regulations to promote a stable banking system
6. Causation
Ans✓✓✓ Implies that a change in one variable causes the other variable to change. - Implies
that there is a direct relationship between the two variables (Typically holds in Theory.)
7. Correlation
Ans✓✓✓ A quality measuring the statistical interdependence between two variables.
8. Demand for money comes from:
Ans✓✓✓ - Transaction Demand (M_DT) - Asset Demand (M_DA)
9. Discount Rate
Ans✓✓✓ The interest rate at which banks can borrow money directly from the Federal
Reserve.
10. Double Coincidence of Wants
Ans✓✓✓ When two people have goods they are both happy to exchange for other goods.
,11. Fallacy of Composition
Ans✓✓✓ When one infers that something is true of the whole from the fact that it is true for a
part of the whole.
12. Federal Open Market Committee
Ans✓✓✓ The policy-making body of the Federal Reserve. Comprised of the Board of
Governors and 5 Federal Reserve district bank presidents.
13. Federal Reserve activities
Ans✓✓✓ - Monetary Policy - Banking Supervision - Financial Services
14. _____________ is the central bank of the United States.
Ans✓✓✓ The Federal Reserve
15. America is a _________ System.
Ans✓✓✓ Hybrid
16. Asset Demand (M_DA)
Ans✓✓✓ The demand for money to be saved for future use. - Changes based on the interest
rate. - Line decreases.
17. Banking Act of 1933: Glass-Steagall
Ans✓✓✓ Separated commercial banking from investment banking and created the Federal
Deposit Insurance Corporation.
18. Banking Supervision
Ans✓✓✓ - Supervise Member Banks - Identify banks in trouble and avoid a run on the bank -
Create regulations to promote a stable banking system
19. Causation
Ans✓✓✓ Implies that a change in one variable causes the other variable to change. - Implies
that there is a direct relationship between the two variables (Typically holds in Theory.)
20. Correlation
Ans✓✓✓ A quality measuring the statistical interdependence between two variables.
21. Demand for money comes from:
Ans✓✓✓ - Transaction Demand (M_DT) - Asset Demand (M_DA)
,22. Discount Rate
Ans✓✓✓ The interest rate at which banks can borrow money directly from the Federal
Reserve.
23. Double Coincidence of Wants
Ans✓✓✓ When two people have goods they are both happy to exchange for other goods.
24. Fallacy of Composition
Ans✓✓✓ When one infers that something is true of the whole from the fact that it is true for a
part of the whole.
25. Federal Open Market Committee
Ans✓✓✓ The policy-making body of the Federal Reserve. Comprised of the Board of
Governors and 5 Federal Reserve district bank presidents.
26. Federal Reserve activities
Ans✓✓✓ - Monetary Policy - Banking Supervision - Financial Services
27. _____________ is the central bank of the United States.
Ans✓✓✓ The Federal Reserve
28. America is a _________ System.
Ans✓✓✓ Hybrid
29. Asset Demand (M_DA)
Ans✓✓✓ The demand for money to be saved for future use. - Changes based on the interest
rate. - Line decreases.
30. Banking Act of 1933: Glass-Steagall
Ans✓✓✓ Separated commercial banking from investment banking and created the Federal
Deposit Insurance Corporation.
31. Banking Supervision
Ans✓✓✓ - Supervise Member Banks - Identify banks in trouble and avoid a run on the bank -
Create regulations to promote a stable banking system
32. Causation
, Ans✓✓✓ Implies that a change in one variable causes the other variable to change. - Implies
that there is a direct relationship between the two variables (Typically holds in Theory.)
33. Correlation
Ans✓✓✓ A quality measuring the statistical interdependence between two variables.
34. Demand for money comes from:
Ans✓✓✓ - Transaction Demand (M_DT) - Asset Demand (M_DA)
35. Discount Rate
Ans✓✓✓ The interest rate at which banks can borrow money directly from the Federal
Reserve.
36. Double Coincidence of Wants
Ans✓✓✓ When two people have goods they are both happy to exchange for other goods.
37. Fallacy of Composition
Ans✓✓✓ When one infers that something is true of the whole from the fact that it is true for a
part of the whole.
38. Federal Open Market Committee
Ans✓✓✓ The policy-making body of the Federal Reserve. Comprised of the Board of
Governors and 5 Federal Reserve district bank presidents.
39. Federal Reserve activities
Ans✓✓✓ - Monetary Policy - Banking Supervision - Financial Services
40. _____________ is the central bank of the United States.
Ans✓✓✓ The Federal Reserve
41. America is a _________ System.
Ans✓✓✓ Hybrid
42. Asset Demand (M_DA)
Ans✓✓✓ The demand for money to be saved for future use. - Changes based on the interest
rate. - Line decreases.
43. Banking Act of 1933: Glass-Steagall
