Exam (elaborations)
Economics Test 2 (Aplia And Book) – Q’s And A’s
Economics Test 2 (Aplia And Book) – Q’s And A’s
[Show more]
Content preview
Economics Test 2 (Aplia And Book) – Q’s And A’sThe FEDs role as "lender of last resort" applies to which financially
troubles institution? Correct Ans - US banks that cannot borrow
elsewhere
How many federal reserve regional banks are there? Correct Ans -
12
What is the FEDs primary tool for changing the money supply? Correct
Ans - open market operation (changing inflation rate and required
reserves)
In order to increase or decrease dollars in the US economy, what will the
FED do? Correct Ans - increase- buy government bonds/ notes
decrease- sell government bonds/ notes
Frictional unemployment- Correct Ans - often results from changes
in the demand for labor among firms
If the government wants to reduce frictional unemployment, what policies
would help achieve this goal? Correct Ans - offering recipients of
unemployment a benefit of cash bonus if they find a new job (incentive).
type of unemployment- Same recently lost his job as a taxi driver.
Minimum- wage legislation keeps employers from adding more of the low-
skill positions for which he qualifies, so he has been unable to find work.
Correct Ans - Structural unemployment
type of unemployment- Beth is a real estate agent. House sales in her area
have declined because the region has been going through a recession. She
has no clients and is currently looking for a new full-time job. Correct
Ans - Cyclical unemployment (the ups and downs of the economy)
type of unemployment- Teresa is a physician who has decided to relocate to
California to be closer to her family. She is currently interviewing with
several prestigious hospitals in the San Francisco Bay Area. Correct
Ans - Frictional unemployment
, Suppose the world price of steel fall substantially. The demand for labor
among tell-producing firms in Pennsylvania will _________. The demand for
labor among automobile-producing firms in Michigan, for which steel is an
input, will _______. the temporary unemployment resulting from such
sectoral shifts in the economy is best described as _______ unemployment.
Correct Ans - decrease; increase; frictional
What are the functions of money in the economy? Correct Ans -
medium of exchange, unit of account, store of value, standard of deffered
payment
medium of exchange, unit of account, store of value- Larry has $1,537 in his
checking account. Correct Ans - store of value (providing means of
transferring purchasing power from the present to the future)
medium of exchange, unit of account, store of value- Larry writes a check
for $3,000. Correct Ans - medium of exchange (providing an
accepted method of payment for goods and services)
medium of exchange, unit of account, store of value- Larry can easily
determine that the price of the computer is more than the price of the
vacation. Correct Ans - unit of account (providing buyers and
sellers a common reference point for valuing goods and services)
list most liquid to least liquid- a share in a publicly traded company, the
funds in a money market account, a $5 bill, your house. Correct Ans -
$5 bill, funds in a money market account, share of stock, house
commodity money- Correct Ans - money taking the form of a
commodity with intrinsic value; value outside of its use as money
fiat money- Correct Ans - money whose value derives from
government decree
What contributes to making the FED an independent policymaking body?
Correct Ans - Members of the Board of Governors are appointed for 14-
year terms
How many members of the FED of governors? Correct Ans - 7
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Studycafe. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for CA$13.71. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
75323 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now