Final Exam Study Guide
Final Exam Study Guide Econ 1051
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This 2 page Study Guide was uploaded by Abbey Notetaker on Sunday March 20, 2016. The Study Guide belongs to Econ 1051 at University of Missouri - Columbia taught by George Chikhladze,Martha Steffens in Summer 2015. Since its upload, it has received 15 views. For similar materials see General Economics in Economcs at University of Missouri - Columbia.
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Date Created: 03/20/16
1. If actual reserves in the banking system are $40,000, excess reserves are $10,000 and checkable deposits are $240,000, then the legal reserve requirement is: 12.5 percent 2. Which event would most likely increase aggregate demand? An appreciation of the dollar 3. The M1 money supply is composed of: Checkable deposits and currency 4. The economy experiences an increase in the price level and an increase in real domestic output. Which is a likely explanation? Interest rates have increased 5. Suppose a commercial banking system has $240,000 of outstanding checkable deposits and actual reserves of $85,000. If the reserve ratio is 25 percent, the banking system can expand the supply of money by a maximum of: $25,000 6. Other things equal, a rightward shift of demand curve would: appreciate the dollar 7. A protective tariff will: Increase the price and sales of domestic producers 8. Cathy Rogers deposits $200 in currency in her checking account at a bank. This deposit is treated as: No change in the money supply because the $200 in currency has been converted to a $200 increase in checkable deposits. 9. Which would most likely shift the aggregate supply curve? A change in: Government spending 10. The economy is experiencing inflation and the federal reserve decides to pursue a restrictive money policy. Which actions by the Fed would be most consistent with this policy? Selling government securities 11. Demand-pull inflation is associated with a(n): Increase in aggregate demand 12. Inflationary pressure is a growing problem for the economy. Therefor, the federal reserve decides to pursue a policy to reduce the inflationary pressure. Which policy changes by the Fed would reinforce each other to achieve that objective? Buying government securities and lowering the reserve ratio 13. Which organization meets regularly to establish rules related to international trade? The World Trade Organization 14. Refer to the graph above. If the supply of money was $200, billion the interest rate would be: 2 percent 15. What function is money serving when you deposit money in a savings account? A store of value 16. Which is an expansionary money policy? Increase the money supply to shift the aggregate demand curve rightward. 17. A graph in the long-run aggregate supply curve is: Vertical 18. “The nation needs to prevent foreign nations from selling their excess goods in are nation at a price below cost so we can save American firms.” This quote would be most closely associated with which protectionist argument? Protection against dumping 19. The following are hypothetical exchange rates: 2 euros=1 pound; $1= 2 pounds. We can conclude that: $1=4 euros
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