Question

Looking for some help checking my answers. Appreciate you economic experts taking a look at my answeres that I bolded. Please let me know which ones are wrong. Thanks!!!

1. In a private closed economy, the two components of aggregate expenditures are:

A. Consumption and government spending

B. Consumption and net exports

C. Consumption, investment, and net exports

D. Consumption and investment

2. The investment schedule shows the:

A. Inverse relationship between the expected rate of return and the quantity of investment demanded

B. Positive relationship between the expected rate of return and the quantity of investment demanded

C. Amounts business firms collectively intend to invest at each possible level of GDP

D. Rate of interest that business firms must pay when they make investments in capital goods

4. Net exports are negative when:

A. Net exports exceed imports

B. Depreciation exceeds exports

C. Exports exceed imports

D. Imports exceed exports

5. Other things being equal, a decrease in an economy's exports will:

A. Increase domestic aggregate expenditures and the equilibrium level of GDP

B. Decrease domestic aggregate expenditures and the equilibrium level of GDP

C. Have no effect on domestic GDP because imports will offset the change in exports

D. Increase the amount of imports consumed by the private sector

6. Which of the following statements is correct?

A. An increase in exports will tend to increase, and an increase in imports will tend to decrease, the equilibrium GDP

B. An increase in exports and an increase in imports will both tend to increase the equilibrium GDP

C. An increase in exports and an increase in imports will both tend to decrease the equilibrium GDP

D. An increase in exports will tend to decrease, and an increase in imports will tend to increase, the equilibrium GDP

7. Which event would most likely decrease an economy's exports?

A. A decline in the tariff on products imported from abroad

B. An increase the prosperity of trading partners for this economy

C. An appreciation of the nation's currency relative to foreign currencies

D. A depreciation of the nation's currency relative to foreign currencies

8. In the aggregate expenditures model of the economy, a downward shift in aggregate expenditures can be caused by a:

A. Decrease in government spending or an increase in taxes

B. Decrease in taxes or an increase in government spending

C. Decrease in interest rates or a decrease in taxes

D. Decrease in saving or an increase in government spending

9. In a recessionary expenditure gap, the equilibrium level of real GDP is:

A. Less than planned aggregate expenditures

B. Greater than planned aggregate expenditures

C. Greater than full-employment GDP

D. Less than full-employment GDP

10. An economy characterized by high unemployment is likely to be:

A. Experiencing a high rate of economic growth

B. Experiencing hyperinflation

C. Having a recessionary expenditure gap

D. Having an inflationary expenditure gap

11. The aggregate demand curve shows the:

A. Inverse relationship between the price level and the quantity of real GDP purchased

B. Direct relationship between the price level and the quantity of real GDP produced

C. Inverse relationship between interest rates and the quantity of real GDP produced

D. Direct relationship between real-balances and the quantity of real GDP purchased

12. The aggregate demand curve or schedule shows the relationship between the total demand for output and the:

A. Income level

B. Interest rate

C. Price level

D. Real GDP

15. A decrease in expected returns on investment will most likely shift the AD curve to the:

A. Right because C will increase

B. Left because C will decrease

C. Right because Ig will increase

D. Left because Ig will decrease

16. The expenditure multiplier concept of the aggregate-expenditures model:

A. Is not at all relevant in the AD-AS model

B. Magnifies the shifts of the aggregate demand curve

C. Explains movement up or down the aggregate demand curve

D. Reverses the shift of the aggregate demand curve

17. If the dollar appreciates in value relative to foreign currencies:

A. Aggregate demand decreases because C decreases

B. Aggregate demand increases because C increases

C. Aggregate demand decreases because net exports decrease

D. Aggregate demand increases because net exports increase

19. A fall in labor costs will cause aggregate:

A. Supply to increase

B. Demand to increase

C. Supply to decrease

D. Demand to decrease

21. When the Federal government uses taxation and spending actions to stimulate the economy it is conducting:

A. Fiscal policy

B. Incomes policy

C. Monetary policy

D. Employment policy

22. Fiscal policy is enacted through changes in:

A. Interest rates and the price level

B. The supply of money and foreign exchange

C. Unemployment and inflation

D. Taxation and government spending

23. The intent of contractionary fiscal policy is to:

A. Increase aggregate demand

B. Decrease aggregate demand

C. Increase aggregate supply

D. Decrease aggregate supply

24. The goal of expansionary fiscal policy is to increase:

A. The price level

B. Aggregate supply

C. Real GDP

D. Unemployment

25. Contractionary fiscal policy would tend to make a budget deficit become:

A. Bigger

B. Smaller

C. A trade deficit

D. A trade surplus

26. You are given the following information about aggregate demand at the existing price level for an economy: (1) consumption = $500 billion; (2) investment = $50 billion; (3) government purchases = $100 billion; and (4) net export = $20 billion. If the full-employment level of GDP for this economy is $620 billion, then what combination of actions would be most consistent with closing the GDP-gap here?

A. Increase government spending and taxes

B. Decrease government spending and taxes

C. Decrease government spending and increase taxes

D. Increase government spending and decrease taxes

27. The more progressive the tax system, the:

A. Less is the built-in stability for the economy

B. Greater is the built-in stability for the economy

C. Less is the effect of crowding-out on the economy

D. Greater is the severity of business fluctuations on the economy

28. Assume that the economy is in a recession and there is a budget deficit. A strict balanced-budget rule that would require the Federal government to balance its budget during a recession would be:

A. Expansionary and worsen the effects of the recession

B. Contractionary and worsen the effects of the recession

C. Contractionary and counter the effects of the recession

D. Expansionary and counter the effects of the recession

29. One timing problem in using fiscal policy to counter a recession is the "recognition lag" that occurs between the:

A. Start of the recession and the time it takes to recognize that the recession has started

B. Start of a predicted recession and the actual start of the recession

C. Time fiscal action is taken and the time that the action has its effect on the economy

D. Time the need for the fiscal action is recognized and the time that the action is taken

30. The crowding-out effect suggests that:

A. Increases in consumption are always at the expense of saving

B. Increases in government spending will close a recessionary expenditure gap

C. Increases in government spending may reduce private investment

D. High taxes reduce both consumption and saving

31. The functions of money are to serve as a:

A. Resource allocator, method for accounting, and means of income distribution

B. Unit of account, store of value, and medium of exchange

C. Determinant of consumption, investment, and government spending

D. Factor of production, exchange, and aggregate supply

32. What function is money serving when you use it when you go shopping?

A. A store of value

B. A unit of account

C. A medium of deferred payment

D. A medium of exchange

33. An asset's liquidity refers to its ability to be:

A. Bought and stored

B. Increasing in value over time

C. Used and enjoyed

D. A means of payment

34. Checkable deposits are:

A. Debts of commercial banks and savings institutions

B. Debts of the Federal government and government agencies

C. Assets of the Federal government and government agencies

D. Assets of commercial banks and savings institutions

35. Checkable deposits are included in:

A. M1 but not in M2

B. M2 but not in M1

C. both M1 and M2

D. neither M1 nor M2

36. The use of a credit card is most similar to:

A. Paying with a check

B. An ACH (automatic clearinghouse) transaction

C. Purchasing a certificate of deposit

D. Obtaining a short-term loan

37. Which of the following "backs" the value of money in the United States?

A. The gold stored in the Federal Reserve Bank of New York

B. The acceptability of it as a medium of exchange

C. The willingness of foreign government to hold U.S. dollars

D. The size of the budget surplus in the U.S. government

38. The Federal backing for money in the United States comes from:

A. Providing sufficient quantities of precious metals such as gold and silver to cover the amount of paper money in circulation

B. Pledging physical assets, such as land, natural resources, and public buildings as collateral for outstanding currency

C. Controlling the money supply in order to keep the value of money relatively stable over time

D. Protecting checkable deposits at financial institutions with deposit guarantees

39. If the purchasing power of the dollar is falling, then it follows that:

A. The price index is falling

B. The price index is rising

C. Nominal incomes are falling

D. Interest rates are rising

40. The Federal Open Market Committee (FOMC):

A. Provides advice on banking stability to the Fed

B. Monitors regulatory banking laws for member banks

C. Sets policy on the sale and purchase of government bonds by the Fed

D. Follows the actions and operations of financial markets to keep them open and competitive