Question

 

1: TIME DEPOSITS ARE PART OF THE MI DEFINITION MONEY

TRUE OR FALSE?

2: WHAT ARE THE TWO WAYS IN WHICH NEW MONEY IS CREATED?

A: NEW SAVINGS ACCOUNT AND ISSUING GOVERNMENT SECURITIES

B: NEW CHECKING ACCOUNT AND ISSUING GOVERNMENT SECURITIES

C: NEW SAVINGS ACCOUNT AND RETIRING GOVERNMENT SECURITIES

D: NEW CHECKING ACCOUNT AND RETIRING GOVERNMENT SECURITIES

3:the nominal interet rate minus the exprected rate of inflaiton is defined as:

a: the discount rate

b: the coupon rate

c: the federal funds rate

d; the real interest rate

4: at what point would an economy move from inflation to hyperinflation

a: when there is a rapid increas in prices

b: when there is a rapid decline in pricies

c: when there is a rapid increase in prices along with changes in buying behavior

d: when there is a rapid decline in prices along with changes in buying behavior

5: in what ways is money a better system for the day to day functioning of hthe economy than a barter system:?

a: money allowes for more efficient pricing of goods and servies as compared to barter system

b: money allows for the direct exchange of goods and services for other goods and services as cmpared to a barter system c

c: money is a system of last resort when there is hyperinflation as compared to barter system

d: money allows for thousands of pricing variations when exhaning goods and services compared to a barter system

5: how do we express GDP as income?

a: Y= C+I+G+(X-M)

B: Y=C+I+T+(X-M)

C: Y=C+S+G

D: Y=C+S+T

6: which insitituion is responsible for the manufacturing of money?

a: the federal reserve bank

b: the US banking committee

c: the federal open market committee

d: the US treasury

8: YOU HAVE 5000.00 AVAILABLE FOR DEPOSIT INTO A SAVINGS ACCOUNT TODAY AND CAN CHOOSE TO MAKE THE DEPOSIT IN AN ACCOUNT THAT OFFERS EITHER SIMPLE OR COMPOUNDED INTEREST. IF BOTH ACCOUNTS OFFER AN 8.5% ANNUAL RATE AND YOU REQUIRE THE FUNDS IN 5 YEARS , WHAT WILL BE THE DIFFERENCE BETWEEN THE FINAL BALANCES IN EACH ACCOUNT?

A: $67.42

B: $189.17

C: 393.28

D: NO DIFFERENCE

9: WHAT IS THE ENDING BALANCE OF $500.00 DEPOSITED INTO A SAVINGS ACCOUNT TODAY THAT IS HELD FOR A TOTAL OF 8 YEARS AND IS PAYING 4.25% INTEREST COMPOUNDED ANNUALLY?

A: 615.65

b: 357.15

c: 700.00

d:406.25

10: an increase or decrease in quantity supplied or demanded represents supply/ demand curve; an increase or decrease in supply or demand represents supply/demand curve

a: movement along a; a shift in the entire

b: a change in the slope of a; a new

c: a shift of the entire; movement along

d: a new; a change in the slope of a

10: In the US what is considered as the most significant part of the GDP?

a: net exports

b: government spending

c: investement

d consumption

Answer 1

1) False.

M1= Cash, demand deposit, travel check

M2= M1+Saving+ time deposit.

2)New saving account, increase deposit in banks,thus increase loan lending capacity of banks and increase money supply.

Buying government Treasury bonds from public will increase monetary base thus increase money supply.

Option C is correct

3) nominal interest - expected inflation= real interest rate.

4)hyper inflation occurs when inflation exceeds 50%.

Option A is right

5) option A is correct

It gives a certain price of a good, whearas in barter system,there are thousand of prices of a single good due to no unit of value.

6)Y=C+I+G+(X-M)

7) federal reserve bank

8) Balance with simple interest=5000+5000*0.085*5=7125

Balance with compound interest=5000*(1.085)^5=5000*1.503=7518.25

Difference=7518.25-7125=393.28

9)Final balance=500*(1.0425)^8=500*1.4=700

10) Consumption is most significant part of US gdp. Almost 67% .