:Other things equal, appreciation of the dollar .

1
increases aggregate demand in the United States and may increase aggregate A)
.supply by reducing the prices of imported resources
increases aggregate demand in the United States and may decrease aggregate B)
.supply by reducing the prices of imported resources
decreases aggregate demand in the United States and may increase aggregate C)
.supply by reducing the prices of imported resources
decreases aggregate demand in the United States and may reduce aggregate D)
.supply by increasing the prices of imported resources

:A rightward shift in the aggregate supply curve is best explained by an increase in .2

.business taxes A)
.productivity B)
.nominal wages C)
.the price of imported resources D)

If the MPC in an economy is .75, government could shift the aggregate demand curve leftward by .3
:$60 billion by
.reducing government expenditures by $12 billion A)
.reducing government expenditures by $60 billion B)
.increasing taxes by $15 billion C)
.increasing taxes by $20 billion D)

:An appropriate fiscal policy for severe demand-pull inflation is .4

.an increase in government spending A)
.depreciation of the dollar B)
.a reduction in interest rates C)
.a tax rate increase D)

?Which of the following represents the most expansionary fiscal policy .5

a $10 billion tax cut A)
a $10 billion increase in government spending B)
a $10 billion tax increase C)
a $10 billion decrease in government spending D)

:Coins held in commercial banks are .6

.included in M1, but not in M2 A)
.included both in M1 and in M2 B)
.included in M2, but not in M1 C)
.not part of the nation's money supply D)

:Most modern banking systems are based on .7

.money of intrinsic value A)
.commodity money B)
.100 percent reserves C)
.fractional reserves D)

:A commercial bank's reserves are .8

liabilities to both the commercial bank and the Federal Reserve Bank holding A)
.them
liabilities to the commercial bank and assets to the Federal Reserve Bank holding B)
.them
.assets to both the commercial bank and the Federal Reserve Bank holding them C)
assets to the commercial bank and liabilities to the Federal Reserve Bank holding D)
.them

Suppose the reserve requirement is 10 percent. If a bank has $5 million of checkable deposits and .9
:actual reserves of $500,000, the bank
.can safely lend out $500,000 A)
.can safely lend out $5 million B)
.can safely lend out $50,000 C)
.cannot safely lend out more money D)

If in the market for money the amount of money supplied exceeds the amount of money households .10
:and businesses want to hold, the interest rate will
.fall, causing households and businesses to hold less money A)
.rise, causing households and businesses to hold less money B)
.rise, causing households and businesses to hold more money C)
.fall, causing households and businesses to hold more money D)

:Open-market operations change .11

.the size of the monetary multiplier, but not commercial bank reserves A)
.commercial bank reserves, but not the size of the monetary multiplier B)
.neither commercial bank reserves nor the size of the monetary multiplier C)
.both commercial bank reserves and the size of the monetary multiplier D)

:If the Fed were to reduce the legal reserve ratio, we would expect .12
.lower interest rates, an expanded GDP, and a higher rate of inflation A)
.lower interest rates, an expanded GDP, and a lower rate of inflation B)
.higher interest rates, a contracted GDP, and a higher rate of inflation C)
.higher interest rates, a contracted GDP, and a lower rate of inflation D)