exam4 - EC202-002SUMI2008 WEEKLYEXAM4

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EC202 - 002 SUM I 2008 WEEKLY EXAM 4 I. MULTIPLE CHOICE QUESTIONS (2 points for each correct answer) Circle CLEARLY the letter corresponding to the one alternative that best completes the statement or answers the question. 1) Which of the following functions of money would be most violated if inflation were high? A) store of value B) unit of account C) certificate of gold D) medium of exchange 2) As labor productivity grew between 2002 and 2003, what was happening to employment? A) Employment was growing at a faster pace than productivity. B) The natural rate of employment was maintained. C) Employment was falling, despite the increase in labor productivity. D) Employment was growing, but at a slower pace than productivity. Scenario 13 - 2 Imagine that Kristy deposits $10,000 of currency into her checking account deposit at Bank A and that the required reserve ratio is 20%. 3) Refer to Scenario 13 - 2. As a result of Kristy ʹ s deposit, Bank A ʹ s reserves immediately increase by A) $2,000. B) $8,000. C) $50,000. D) $10,000. 4) Refer to Scenario 13 - 2. As a result of Kristy ʹ s deposit, checking account deposits in the banking system as a whole (including the original deposit) could eventually increase up to a maximum of A) $50,000. B) $100,000. C) $8,000. D) $10,000. 5) Long run macroeconomic equilibrium occurs when A) aggregate demand equals short run aggregate supply. B) structural and frictional unemployment equals zero. C) aggregate demand equals short run aggregate supply and they intersect at a point on the long run supply curve. D) output is above potential GDP. 6) When the price level rises from 110 to 115, the aggregate level of GDP supplied rises from $80 billion to $120 billion. This ________ relationship represents the ________ relationship between GDP and the price level. A) positive; short - run B) positive; long - run C) negative; short - run D) negative; long - run 1
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EC202 - 002 SUM I 2008 7) The M1 measure of the money supply equals A) currency plus checking account balances plus traveler ʹ s checks plus savings account balances. B) paper money plus coins in circulation. C) currency plus checking account balances. D) currency plus checking account balances plus traveler ʹ s checks. 8) When the price level in the U.S. rises relative to the price level of other countries, ________ will rise, ________ will fall, and ________ will fall. A) net exports; exports; imports B) imports; exports; net exports C) net exports; imports; exports D) exports; imports; net exports 9) The Federal Reserve ʹ s four goals of monetary policy are A) price stability, low government budget deficits, low current account deficits, and low rate of bank failures. B) low rate of bank failures, high reserve ratios, price stability, and economic growth. C) price stability, high employment, economic growth, and stability of financial markets and institutions. D) low government budget deficits, low current account deficits, high employment, and a high foreign exchange value of the dollar.
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This note was uploaded on 04/21/2009 for the course EC 202 taught by Professor Sturgill during the Spring '07 term at N.C. State.

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exam4 - EC202-002SUMI2008 WEEKLYEXAM4

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