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Sophia (Macroeconomics) - Unit 3 Milestone Questions and Answers Already Solved

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Sophia (Macroeconomics) - Unit 3 Milestone Questions and Answers Already Solved Which statement below regarding monetary policy is false? ✔✔Central banks aim for an inflation rate of 5%. What... does the expression Y-(C+T) represent? ✔✔Public savings If the MPC is 0.75 and the government increases spending by $100 billion, the effect this change has on the economy will be which of the following? ✔✔There will be an increase of $400 billion in economic activity. Which of the following is NOT a way that the government finances fiscal policy? ✔✔Printing money Which of the following is NOT a way that the Fed prevents runs from happening? ✔✔Private banks rely on the Federal Government's oversight of the Federal Reserve's monetary policies. What happens during a bank run? ✔✔Many depositors demand their funds to be repaid. Which of the following is an example of contractionary monetary policy? ✔✔Open market sale of treasury securities Which of the following makes the Federal Reserve different from central banks in other countries? ✔✔The Federal Reserve is not directly controlled by the federal government. If the reserve requirement for a bank is 25%, $15 in M0 will lead to which of the following amounts of money for M1? ✔✔$60 The discount rate is charged to ✔✔member banks for short term loans from the Fed Which of the following is an example of deflation? ✔✔Someone owes more on a house than it is worth. Which statement below corresponds to the term "central bank?" ✔✔They have a variety of tools that can be used to control the money supply. The terms M0, M1, M2 classify money according to which of the following? ✔✔Level of liquidity What is the benefit of having a sole authority price currency? ✔✔The value of currency becomes more certain. Which of the following is NOT a way that the Fed uses an open market to control the money supply? ✔✔The Fed dictates the amount of money that banks must keep in their vaults. Which of the following is false about budget deficits? ✔✔They typically happen when using contractionary fiscal policy. Which of the following is the reason the United States had been opposed to the idea of central banks in the past? ✔✔The British central bank had exerted control over the colonies. Of the following true statements, which statement might be a reason that budget deficits make interest rates go up? ✔✔The increased demand for loanable funds in the private market will drive interest rates up. Which of the following is an example of expansionary fiscal policy? ✔✔Reducing taxes Which of the following is an example of the function of money as a unit of account? ✔✔As the use of gold evolved, people would list prices for products in gold. Using the expenditure approach and the information shown here, which of the following is the GDP? Individual purchases: $5 billion Government purchases: $10 billion Business investments: $5 billion Imports: $5 billion Exports: $10 billion ✔✔$25 billion Which of the following is NOT a step in the development of the gold standard? ✔✔Gold functioned in limited ways; its primary use was in making jewelry. Which of the following is true about the federal funds rate? ✔✔It is one of the many tools the Fed uses to control the money supply. [Show More]

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