Milestone 3 Macroeconomics Exam With Answers. Latest 2021.Which statement below corresponds to the term "Federal Reserve?"
This acts as a central
... [Show More] bank for its region of the country.
This is independent from the U.S. government.
This directly sets all interest rates in the economy.
The leader of this is an elected official.
CONCEPT
U.S. Central Bank: Federal Reserve
2
Which of the following is the reason why individuals are more
certain of the value of their currency with central banks?
Central banks use paper money.
Central banks hold money in their reserves and make loans based on this money.
Central banks have tools that they use to control and stabilize the money supply.
Central banks lessen the reliance on the gold standard.
CONCEPT
Central Banks
3
Under which of the following circumstances would a fractional
reserve system fail?
As long as banks are able to earn money on interest
As long as there is more gold than paper money
As long as the holders of paper currency demand more gold than what banks are
holding as reserves
As long as banks are able to make loans
CONCEPT
Fractional Gold Standard/Fiat Currency
4
Which of the following definitions corresponds to economic growth?
Percent change in value of the sum of a country's goods and services
The quantity of one type of money that corresponds to another
The difference between tax revenue and government expenditures
The cost of money
CONCEPT
Economic Growth
5
Which of the following is an example of deflation?
Economic instability destroys the value of the currency.
Someone owes more on a house than it is worth.
People revert back to a barter economy.
Prices are increasing, so the purchasing power of the currency is falling.
CONCEPT
Goals of Monetary Policy
6
When Treasury bills are auctioned off, if buyers are willing to pay
$900 for a $1,000 treasury bill, the government is being asked to
pay what percent in interest, if the bills mature after a period of one [Show Less]