Exam_3_Version_1.Economics_102_Rawlins - EconS 102 Spring...

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EconS 102, Spring 2008 Rawlins 3rd Mid-Term Exam Version: 1 1. The aggregate demand curve shows how real GDP purchased varies with changes in: a. unemployment. b. output. c. the price level. d. the interest rate. 2. The idea that higher prices reduce the purchasing power of financial assets and lead to less consumption and more saving is known as the: a. real wealth effect. b. interest rate effect. c. foreign purchases effect. d. income effect. e. aggregate demand effect. 3. Which of the following policies is a supply-side policy? a. Reduction in taxes. b. Reduction in regulation. c. Reduction in resource prices. d. Subsidies to produce technological advances. e. All of the above. 4. According to supply-side economists, lowering corporate income taxes: a. results in wage hikes for employees but no economic growth. b. moves society toward greater income equality. c. checks the expansion of real GDP and employment. d. stimulates investment and economic growth. e. does not create enough incentive for producers to increase production. 5. The benefits-received principle of taxation is most evident in: a. progressive tax rates. b. excise taxes on gasoline. c. the personal income tax. d. the corporate income tax. 6. Which of the following answers best reflects the ability-to-pay philosophy of taxation? a. Property tax. b. Progressive income tax. c. Excise tax on gasoline. d. Excise tax on cigarettes. 7. If Congress fails to pass a budget before the fiscal year starts, then federal agencies may continue to operate only if Congress has passed a: a. balanced budget amendment. b. deficit reduction plan. c. conference resolution. d. continuing resolution. Page | 1
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8. When the U. S. federal government runs a budget deficit, it borrows money by selling: a. Treasury bills, notes, and bonds. b. publicly owned land. c. its gold reserves. d. financial assets located in foreign banks. 9. The sum of past federal budget deficits is the: a. GDP debt. b. trade debt plus GDP. c. national debt. d. Congressional debt. 10. The M1 money supply is defined to be the sum of currency, traveler's checks, and: a. checkable deposits. b. Treasury bonds. c. savings accounts. d. large time deposits. 11. Credit cards are: a. M1 money. b. M2 and M3 money. c. M3 money. d. not money. 12. The number of presidentially appointed members who sit on the Federal Reserve Board of Governors is: a. none. b. seven. c. nine. d. twelve. 13. Decisions regarding purchases and sales of government securities by the Fed are made by the: a. Federal Funds Committee. b. Discount Committee. c. Federal Open Market Committee. d. FDIC. 14. Which of the following directs the buying and selling of U.S. government securities? a.
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Exam_3_Version_1.Economics_102_Rawlins - EconS 102 Spring...

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