Liberty University ECON 214 Exam 3
ECON 214 Exam 3
· Question 1
2 out of 2 points
Refer to the following figure to answer the questions that follow.
According to the figure, if the government increases spending by only $4 billion in an effort to shift aggregate demand enough to return to long-run equilibrium, the marginal propensity to consume must be equal to:
· Question 2
2 out of 2 points
When money is acting as a unit of account, it:
· Question 3
2 out of 2 points
During economic expansions:
· Question 4
2 out of 2 points
If the marginal propensity to consume is equal to 0.75, the spending multiplier is equal to:
· Question 5
2 out of 2 points
Why did tax revenues fall so sharply after 2007?
· Question 6
2 out of 2 points
Supply-side fiscal policy will lead to:
· Question 7
2 out of 2 points
Which of the following is not a revenue source for the U.S. federal government?
· Question 8
2 out of 2 points
When I decide to deposit $100 in cash into my savings account at the bank, how would this be reflected on the bank’s balance sheet?
· Question 9
2 out of 2 points
Which of the following is not a component of M1?
· Question 10
2 out of 2 points
If a bank has a required reserve ratio of 25% and there is $10,000 in deposits, what is the amount of required reserves?
· Question 11
2 out of 2 points
If the economy begins to fall into a recession, one would expect Congress and the president to conduct:
· Question 12
2 out of 2 points
What are federal funds?
· Question 13
2 out of 2 points
Why is a budget deficit not necessarily a bad thing?
· Question 14
2 out of 2 points
Supply-side fiscal policy initiatives take a long time to shift the aggregate supply curve to the right. As a result:
· Question 15
2 out of 2 points
A budget is:
· Question 16
0 out of 2 points
Payroll taxes:
· Question 17
2 out of 2 points
Which of the following would be the theoretical outcome of expansionary fiscal policy in the following aggregate demand–aggregate supply model?
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· Question 18
2 out of 2 points
By 1918, the top marginal income tax rate in the United States rose to:
· Question 19
2 out of 2 points
Time lags, crowding-out, and savings shifts are all:
· Question 20
2 out of 2 points
Use the following example to answer the questions that follow:
Imagine that you deposit $25,000 in currency (which you had been storing in your closet), into your checking account at the bank. Assume that this institution has a required reserve ratio of 25%.
As a result of this deposit, by how much will the bank’s reserves increase?
· Question 21
2 out of 2 points
In which of the following situations does money serve as a unit of account?
· Question 22
2 out of 2 points
During which of the following situations would you advise for expansionary fiscal policy?
· Question 23
2 out of 2 points
The wealthiest 20% of households in the United States:
· Question 24
2 out of 2 points
Why do Social Security and Medicare pose problems for the federal government budget?
· Question 25
2 out of 2 points
Use the following table to answer the questions that follow.
According to the table, the country with the lowest average yearly budget deficit over the time period is:
· Question 26
2 out of 2 points
Lowering marginal income tax rates for individuals:
· Question 27
2 out of 2 points
How is it that the banking system is able to lend by a multiple of its excess reserves?
· Question 28
2 out of 2 points
Countercyclical fiscal policy:
· Question 29
2 out of 2 points
Where MPC is the marginal propensity to consume, the formula for the spending multiplier is:
· Question 30
2 out of 2 points
Refer to the following table to answer the questions that follow.
Using the table, what is the marginal income tax rate for someone who makes $67,000 per year?
· Question 31
2 out of 2 points
The assertion that increases in government spending and decreases in taxes are largely offset by increases in savings is called:
· Question 32
2 out of 2 points
Government programs that automatically implement countercyclical fiscal policy in response to economic conditions are called:
· Question 33
0 out of 2 points
When the government borrows, the ___________ loanable funds shifts to the right, causing the interest rate to ___________, which causes private investment to ___________.
· Question 34
2 out of 2 points
Mandatory outlays are different than discretionary outlays because:
· Question 35
2 out of 2 points
The use of the money supply to influence the economy is:
· Question 36
2 out of 2 points
The Laffer curve shows that:
· Question 37
2 out of 2 points
When can a bank make loans?
· Question 38
2 out of 2 points
When a bank decided to invest in cash-counting equipment and new cubicles for its loan officers, they were recorded on the bank balance sheet as:
· Question 39
2 out of 2 points
Mandatory outlays:
· Question 40
2 out of 2 points
____________ is/are considered a liability on a bank’s balance sheet.
