Econ KSU final exam 02 practice
Which of the following is an example of barter?
A barber gives a plumber a haireut in exchange for the plumber fixing the barber's leaky faucet.
The measure of the money stock called M1 includes
wealth held by people in their checking accounts.
The Federal Reserve
is the central bank of the United States.
A bank has an 8 percent reserve requirement, $10,000 in deposits, and has loaned out all it can, given the reserve requirement.
It has $800 in reserves and $9,200 in loans.
A bank has $8,000 in deposits and $6,000 in loans. It has loaned out all it can, given the reserve requirement. It follows that the reserve requirement is
25 percent.
A bank has a 10 percent reserve requirement, $36,000 in loans, and has loaned out all it can, given the reserve requirement.
It has $40,000 in deposits.
If the reserve requirement is 10 percent, a bank desires to hold no excess reserves, and it receives a new deposit of $500, it
must increase required reserves by $50.
Suppose the Fed requires banks to hold 9 percent of their deposits as reserves. A bank has $18,000 of excess reserves and then sells the Fed a Treasury bill for $9,000. How much does this bank now have available to lend out if it decides to hold only required reserves?
$27,000
If the reserve ratio is 4 percent, then the money multiplier is
25.
If the money multiplier is 3 and the Fed buys $50,000 worth of bonds, what happens to the money supply?
It increases by $150,000.
The discount rate is
the interest rate the Fed charges banks.
When the Fed decreases the discount rate, banks will
borrow more from the Fed and lend more to the public. The money supply increases.
Which of the following both increase the money supply?
A decrease in the discount rate and a decrease in the interest rate on reserves
The nation of Wheatland forbids international trade. In Wheatland, you can buy 1 pound of corn for 3 pounds of fish. In other countries, you can buy 1 pound of corn for 2 pounds of fish. These facts indicate that
if Wheatland were to allow trade, it would import corn.
A tax on an imported good is called a
tariff.
Suppose Japan exports cars to Russia and imports wine from France. This situation suggests
Japan has a comparative advantage relative to Russia in producing cars, and France has a comparative advantage relative to Japan in producing wine.
When a country allows trade and becomes an importer of bottled water, which of the following is not a consequence?
The losses of domestic producers of bottled water exceed the gains of domestic consumers of bottled water.
Assume, for Vietnam, that the domestic price of textiles without international trade is higher than the world price of textiles. This suggests that, in the production of textiles,
other countries have a comparative advantage over Vietnam and Vietnam will import textiles.
Assume, for Vietnam, that the domestic price of textiles without international trade is lower than the world price of textiles. This suggests that, in the production of textiles,
Vietnam has a comparative advantage over other countries and Vietnam will export textiles.
If a country's domestic price of a good is lower than the world price, then that country has a comparative advantage in producing that good.
True