If the Federal Reserve institutes a policy to reduce inflation, which of the following is most likely to increase?

Economic Concepts Quiz

Quiz
•
Others
•
12th Grade
•
Hard
Angelita A
FREE Resource
43 questions
Show all answers
1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Tax rates
Investment
Government spending
Interest rates
Gross domestic product
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
An increase in government spending with no change in taxes leads to a
lower income level
lower price level
smaller money supply
higher interest rate
higher bond price
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Country H’s current domestic output is lower than its potential domestic output. Assume that the central bank now decreases its administered interest rates. What will be the short-run effects of the central bank’s action on cyclical unemployment and real income?
Cyclical unemployment will increase, and real income will increase.
Cyclical unemployment will increase, and real income will decrease.
Cyclical unemployment will increase, and real income will decrease.
Cyclical unemployment will remain the same, and real income will increase.
Cyclical unemployment will decrease, and real income will increase.
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
The federal funds rate is the interest rate that
the Federal Reserve charges the federal government on its loans
banks charge one another for short-term loans
banks charge their best customers
equalizes the yield on government bonds and corporate bonds
is equal to the inflation rate
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Assuming a banking system with limited reserves, when the central bank buys government securities on the open market, which of the following will decrease in the short run?
Interest rates
Taxes
Investment
The amount of money loaned by banks
The money supply
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following would lead to an increase in nominal interest rates?
An expansionary monetary policy accompanied by an increase in the demand for money
An expansionary monetary policy accompanied by a decrease in the demand for money
An expansionary monetary policy conducted without any change in the demand for money
A contractionary monetary policy accompanied by an increase in the demand for money
A contractionary monetary policy accompanied by a decrease in the demand for money
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
An increase in the demand for loanable funds could be best explained by which of the following?
There is a decrease in investment spending.
There is an increase in the government’s budget surplus.
Firms are optimistic about the future performance of the country’s economy.
Domestic investors seek higher returns by investing in foreign financial assets.
The economy is facing political instability.
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