
AP Macro Fed/Money Market Questions

Quiz
•
Social Studies
•
12th Grade
•
Hard
Used 17+ times
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11 questions
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1.
MULTIPLE CHOICE QUESTION
1 min • 1 pt
Which of the following will lead to a decrease in a nation’s money supply?
A decrease in income tax rates
A decrease in the discount rate
An open market purchase of government securities by the central bank
An increase in reserve requirements
An increase in government expenditures on goods and services
2.
MULTIPLE CHOICE QUESTION
1 min • 1 pt
Which of the following will most likely lead to a decrease in inflationary expectations?
A decrease in the marginal propensity to save
A decrease in imports
A decrease in the money supply
An increase in the government budget deficit
An increase in the prices of raw materials
3.
MULTIPLE CHOICE QUESTION
1 min • 1 pt
A reduction in inflation can best be achieved by which of the following combinations of fiscal and monetary policy?
Increase taxes, Sell government bonds
Decrease taxes, Buy government bonds
Decrease taxes, Lower margin requirements
Decrease government spending, Lower discount rate
Increase government spending, Raise discount rate
4.
MULTIPLE CHOICE QUESTION
1 min • 1 pt
A real tricky one! A simultaneous increase in inflation and unemployment could be explained by an increase in which of the following?
Consumer spending
The money supply
Labor productivity
Investment spending
Inflationary expectations
5.
MULTIPLE CHOICE QUESTION
1 min • 1 pt
An increase in the government budget deficit is most likely to result in an increase in which of the following?
The marginal propensity to consume
Exports
The real interest rate
The money supply
The simple multiplier
6.
MULTIPLE CHOICE QUESTION
1 min • 1 pt
A commercial bank’s ability to create money depends on which of the following?
The existence of a central bank
A fractional reserve banking system
Gold or silver reserves backing up the currency
A large national debt
The existence of both checking accounts and savings accounts
7.
MULTIPLE CHOICE QUESTION
1 min • 1 pt
Another tricky one! In the short run, which of the following would occur to bond prices and interest rates if a central bank bought bonds through open-market operations?
no change; increase
increase; increase
increase; decrease
decrease; increase
decrease; decrease
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