Question

An upswing or recovery phase in the business cycle is most likely to be associated with

lower employment and lower prices
lower employment and higher prices
higher employment and lower prices
higher employment and higher prices

Which of the following is used by the Federal Reserve to reduce the money supply?

Increasing the prime rate
Increasing the discount rate
Increasing taxes
Decreasing government expenditures

The gross domestic product (GDP) may provide an inaccurate measurement of the productive activity within a country because:

the value of intermediate goods is double-counted
exports are excluded from the calculation
changes in business inventories are not taken into account
underground economic activity is not included in the calculation.

Under a system of flexible exchange rates, which of the following factors would most likely lead to an appreciation of the dollar against foreign currencies?

A decrease in the demand for United States exports
A decrease in the growth rate of the United States economy relative to the rest of the world
An increase in the United States inflation rate relative to the rest of the world
An increase in the United States interest rates relative to the rest of the world

An important role of the Federal Reserve System is to

determine tax rates annually
control the supply of money
collect revenues from tariffs
reduce the size of the public debt

According to Adam Smith’s The Wealth of Nations, societies would gain economic advantages from which of the following?

Division of labor
Strategic planning
Scientific management
Employee empowerment

Which of the following best describes the macroeconomic effects of a rightward shift of a country’s aggregate supply curve?

Unemployment Rate- DecreaseInflation Rate- IncreaseGross Domestic Product- Increase
Unemployment Rate- DecreaseInflation Rate- DecreaseGross Domestic Product- Increase
Unemployment Rate- IncreaseInflation Rate- IncreaseGross Domestic Product- Decrease
Unemployment Rate- IncreaseInflation Rate- DecreaseGross Domestic Product- Decrease

Experience-curve pricing assumes which of the following?

Average costs will increase
Average costs will decrease.
Prices will be changed each time more experience is obtained.
The price a consumer will pay for a new product is best estimated from the life cycle of a similar product.

All of the following are true of the Federal Reserve system in the United States EXCEPT:

It is divided into twelve Federal Reserve districts.
It holds deposits (or reserves) of member banks.
It provides facilities for check clearance.
It includes all commercial banks as members

The gross domestic product (GDP) is a measure of the

total production cost of all intermediate and final goods sold in the economy in one year.
total market value of all final goods and services produced in the economy in one year.
replacement dollar cost of all assets accumulated in the economy at some point in time.
original dollar cost of all assets accumulated in the economy at some point in time.

Answer 1

a).

An upswing or recovery phase in the business cycle the SRAS is upward sloping implied the price is high and employment is high, => the correct option is “D”.

b).

If the Federal Reserve increase the discount rate, => the commercial bank will reduce borrowing from the central bank, => the money supply decreases. The correct option is “B”.

c).

The GDP may not provide accurate measurement of the productive activity within a country because “underground economic activity is not included in the calculation”. So, the correct option is “D”.

d).

According to UPI=uncovered interest rate parity the following condition hold.

=> iUS = iW + d, where “iUS = US interest rate”, “iW=rest of the world interest rate”. Here is “iUS” increases “exchange rate” have to decreases, => “d=expected depreciation of US currency” will increase to maintain the equality. So, here the correct option is “D”.