ECO 405 Week 9 Quiz

8/20/2019 ECO 405 Week 9 Quiz

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ECO 405 Week 9 Quiz – Strayer

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Quiz - Cha%ter .. an# .+

Econo,ic "rowth& Why /s he Econo,ic 1oa# So Bu,%y2

$ulti%le Choice Questions

1. Which Of The Following Is Consistent With Economic Growth?A. Lower Unemployment. Incre!se" G"pC. Incre!se" Aggreg!te #em!n"#. Incre!se" $!lesE. All Of The A%o&e

'. Why Is Economic Growth An Import!nt Economic An" $oci!l Iss(e?A. Economic Growth Le!"s To Impro&ements In O(r $t!n"!r" Of Li&ing. Lower Le&els Of Unemployment An" )o&erty C!n e Achie&e" Thro(gh

Economic GrowthC. A Growing Economy )ro&i"es Cons(mers With *ore Choices An" Opport(nities#. All Of The A%o&eE. Economic Growth Is +ot An Import!nt Economic Iss(e

,. Which Of The Following $t!tements Is A%o(t Economic Growth?A. Economic Growth Is A $hort-(n )rocess. Growth Of An Economy Is Gener!lly A $mooth )rocess Th!t Occ(rs O&er TimeC. Economic Growth Is A Long-(n )rocess es(lting From The Compo(n"ing Of*!ny E&ents#. To *e!s(re Economic Growth/ Economists An!ly0e Ch!nges In The +!tion!l#e%tE. The U.$. Economy !s +e&er E2perience" A 3e!r Of +eg!ti&e Economic Growth

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8/20/2019 ECO 405 Week 9 Quiz


4. Which Of The Following Is The *ost Commonly Use" *e!s(rement Of EconomicGrowth? Ch!nges InA. e!l G"p. The *oney $(pplyC. +omin!l G"p

#. The Fe"er!l Go&ernment #e%tE. The Le&el Of Intern!tion!l Tr!"e

8/20/2019 ECO 405 Week 9 Quiz


5. Why #o $m!ll #ifferences In Economic Growth !tes To"!y es(lt In $ignific!nt#ifferences In The Le&el Of Economic Acti&ity In The F(t(re?A. Growth !tes #isco(nt O&er Time. Economic Growth Compo(n"s 3e!r After 3e!r

C. Economics Grow In An Arithmetic F!shion#. (siness Cycles Are Less Li6ely At igher !tes Of GrowthE. All Of The A%o&e

7. Co(ntries A An" $t!rt O(t With e!l G"p E8(!l To 91/:::. If Co(ntry A GrowsAt A !te Of 5; While Co(ntry Grows At A !te Of 1:;/ Wh!t Is Co(ntry A<sLe&el Of e!l G"p After , 3e!rs?A. 91/:::

. 91/:5:C. 91/15=#. 91/5::E. 9'/5::

>. Co(ntries A An" $t!rt O(t With e!l G"p E8(!l To 91/:::. If Co(ntry A GrowsAt A !te Of 5; While Co(ntry Grows At A !te Of 1:;/ Wh!t Is Co(ntry <sLe&el Of e!l G"p After , 3e!rs?A. 91/:::

. 91/1::C. 91/'1:#. 91/,::E. 91/,,1

=. Of The Following/ Which Of The Following !l(es *ost Closely Appro2im!tesThe A&er!ge Ann(!l !te Of Growth For The U.$. Economy $ince 1@7:?A. 1.75;

. 1:.'';C. 5.,5;#. 4.:';E. ,.'7;

8/20/2019 ECO 405 Week 9 Quiz


@. Which #ec!"e es(lte" In The Lowest A&er!ge Ann(!l !te Of Economic GrowthIn The U.$.?A. 1@5:s. 1@7:s

C. 1@>:s#. 1@=:sE. Un6nown

1:. Which Of The Following #ec!"es !" The ighest A&er!ge Ann(!l !te OfEconomic Growth In The U.$.?A. 1@,:s. 1@7:s

C. 1@>:s#. 1@=:sE. 1@@:s

11. Wh!t Term Is Use" To #escri%e An Err!tic $hort-(n Fl(ct(!tion In EconomicActi&ity Aro(n" The Long-(n Tren"?A. Economic #epression. Economic oomC. (siness Cycle

#. ecessionE. #iminishing et(rns

1'. Which Of The Following Is +ot A )h!se Of E&ery (siness Cycle?A. Tro(gh. E2p!nsionC. Contr!ction#. #epressions

E. )e!6

8/20/2019 ECO 405 Week 9 Quiz


1,. Which Of The Following Lists The Fo(r )h!ses Of The (siness Cycle In TheCorrect $e8(ence?A. E2p!nsion/ )e!6/ Contr!ction/ Tro(gh. E2p!nsion/ Contr!ction/ )e!6/ Tro(gh

C. E2p!nsion/ )e!6/ Contr!ction/ #epression#. E2p!nsion/ )e!6/ #epression/ Tro(ghE. )e!6/ ecession/ Tro(gh/ #epression

14. Which )h!se Of The (siness Cycle est #escri%es An Economy Th!t IsE2periencing A )ositi&e !te Of Economic Growth?A. E2p!nsion. )e!6

C. Contr!ction#. Tro(ghE. #epression

15. When The Economy En"s An E2p!nsion/ It Enters Which )h!se Of The (sinessCycle?A. E2p!nsion. )e!6 C. Contr!ction

#. Tro(ghE. #epression

17. A #ecline In The Le&el Of Economic Acti&ity Occ(rs #(ring Which )h!se OfThe (siness Cycle?A. E2p!nsion. )e!6 C. Contr!ction

#. Tro(ghE. #epression

8/20/2019 ECO 405 Week 9 Quiz


1>. When Economic O(tp(t its A $hort-(n Economic Low/ The Economy Is InWhich )h!se Of The (siness Cycle?A. E2p!nsion. )e!6

C. Contr!ction#. Tro(ghE. #epression

1=. An E2ception!lly $trong An" )rolonge" Contr!ction Is nown AsA. A Tro(gh. A ecessionC. An Economic (st

#. A $(per Contr!ctionE. A (siness Cycle

1@. The L!st #epression E2perience" y The U.$. Economy Occ(rre"A. #(ring The 1@>:s. In 1@='C. #(ring The 1@,:s#. etween 1@>4-1@>5E. In 1@@:

':. Wh!t Is The A&er!ge Length Of A Typic!l (siness Cycle In The *o"ern U.$.Economy?A. 1' *onths. ,7 *onthsC. 7: *onths#. @5 *onthsE. 1': *onths

8/20/2019 ECO 405 Week 9 Quiz


'1. Which Gro(p Is esponsi%le For Anno(ncing The #!tes For E!ch )h!se Of AU.$. (siness Cycle?A. The Fe"er!l eser&e. The +!tion!l (re!( Of Economic ese!rch

C. The #ep!rtment Of Commerce#. The (re!( Of L!%or $t!tisticsE. The Fe"er!l (siness Cycle Committee

''. The *ost Commonly Use" Tool To Forec!st F(t(re Ch!nges In EconomicActi&ity Is TheA. Le!"ing Economic In"ic!tors In"e2. $(pply Of *oney

C. Unemployment !te#. L!gging Economic In"ic!tors In"e2E. Fe"er!l ("get #eficit

',. The Economic !ri!%les Th!t *!6e Up The Le!"ing Economic In"ic!tors In"e2Ten" To *o&e In The BBBBBB #irection As O&er!ll Economic O(tp(t An" #o $o

BBBBB Ch!nges In e!l G"p.A. Opposite )rior To. $!me After

C. Opposite After #. $!me )rior ToE. $!me $im(lt!neo(sly As

'4. Which Of The Following Is +ot A%o(t (siness Cycles?A. All (siness Cycles !&e Fo(r #istinct )h!ses. The A&er!ge Length Of A U.$. (siness Cycle Is A%o(t 7: *onthsC. $ince 1@7:/ The U.$. !s E2perience" $i2 Complete (siness Cycles

#. The L!st Economic #epression In The U.$. Occ(rre" In The 1@,:sE. The T(rning )oints Of A (siness Cycle C!n e E!sily )re"icte"

8/20/2019 ECO 405 Week 9 Quiz


'5. Wh!t #o 3o( C!ll (siness Cycle Theories !se" On The elief Th!t EconomicActi&ity Follows Gener!l Tren"s Of Optimism An" )essimism?A. Theories Of E2pect!tions. e!l (siness Cycle Theories

C. Theories Of Inno&!tion#. Theories Of E2tern!litiesE. $(nspot Theories

'7. Which Of The Following Economists Is Associ!te" With The (siness CycleTheory Of Inno&!tions?A. Dohn *!yn!r" eynes. Willi!m $t!nley Dones

C. Doseph $ch(mpeter #. Ansel $h!rpE. A"!m $mith

'>. *onet!ry Theories Of The (siness Cycle )ost(l!te Th!t Cycles Are $tronglyInfl(ence" y The )olicy Actions Of TheA. U.$. Congress. Fe"er!l eser&eC. Worl" Tr!"e Org!ni0!tion

#. +!tion!l (re!( Of Economic ese!rchE. U.$. #ep!rtment Of Commerce

'=. Which Of The Following Foc(ses )rim!rily On Aggreg!te $(pply !ri!%les?A. Theory Of E2pect!tions. E2ogeno(s TheoriesC. *onet!ry Theories#. e!l (siness Cycle Theories

E. De&ons< $(nspot Theory

8/20/2019 ECO 405 Week 9 Quiz


'@. Wh!t W!s The First Theory )(t Forth y An Economist To E2pl!in The)henomen! Of (siness Cycles?A. In&entory Theory. $ch(mpeter<s Theory Of Inno&!tion

C. e!l (siness Cycle Theories#. Theory Of E2pect!tionsE. De&ons< $(nspot Theory

,:. Wh!t Are The Two )rim!ry #etermin!nts Of Economic Growth?A. The A&!il!%ility Of eso(rces An" )ro"(cti&ity F!ctors. Technology An" *oneyC. The (!ntity Of C!pit!l An" The (!ntity Of *oney

#. The A%ility To Tr!"e An" The $i0e Of The L!%or ForceE. Comp!r!ti&e A"&!nt!ge An" The L!w Of #iminishing et(rns

,1. Wh!t Is The es(lt Of A Growing L!%or Force?A. Lower !tes Of Interest In The C!pit!l *!r6et. igher !tes Of UnemploymentC. The Economy<s )ro"(ction )ossi%ilities C(r&e $hifts O(tw!r"#. The Economy<s )ro"(ction )ossi%ilities C(r&e $hifts Inw!r"E. The Economy<s !te Of Growth *(st $low To Accommo"!te *ore )eople

,'. Which Of The Following Terms Is Use" To #escri%e The )(rch!se Of C!pit!l?A. $!&ings. Cons(mptionC. Technology#. In&estmentE. )ro"(ction

8/20/2019 ECO 405 Week 9 Quiz


,,. Why #oes $pen"ing On C!pit!l Ten" To Incre!se Economic Growth *ore Th!n$pen"ing Of Cons(mption Goo"s? ec!(seA. C!pit!l L!sts Longer Th!n Cons(mer Goo"s. C!pit!l C!n e Use" To )ro"(ce F(t(re Goo"s An" $er&ices

C. C!pit!l )(ts Technology To Use#. )eople )refer To In&est In C!pit!l In Or"er To Gener!te IncomeE. C!pit!l )(rch!ses Are T!2e" At A Lower !te Th!n Cons(mption )(rch!ses

,4. Wh!t W!s The )rim!ry Opport(nity Cost Of The Former $o&iet Union<s )olicy Toe!&ily In&est In C!pit!l For Economic Growth?A. An In!%ility To Tr!"e With Other +!tions. #emocr!cy

C. Foregone Cons(mer Goo"s#. Technologic!l Inno&!tionsE. Foregone *ilit!ry Goo"s

,5. Initi!lly 1: Wor6ers )ro"(ce 1:: Units Of O(tp(t In An Economy. The +e2t 3e!r/': Wor6ers )ro"(ce '5: Units Of O(tp(t In The $!me Economy. )ro"(cti&ity In TheEconomy !sA. #o(%le". *ore Th!n #o(%le"

C. Incre!se"#. #ecre!se"E. +ot Ch!nge"

,7. Which Of The Following Is The est #efinition Of )ro"(cti&ity?A. A *e!s(rement Of ow Efficiently eso(rces Are Con&erte" Into Goo"s An"$er&ices Thro(gh A )ro"(ction )rocess. A *e!s(rement Of ow Technology Incre!ses The A%ility Of An Economy To

)ro"(ce Goo"s An" $er&icesC. The !tio Of Inp(ts To O(tp(t#. The (!ntity Of Goo"s An" $er&ices )ro"(ce" #(ring A Gi&en )erio" Of Timey L!%or E. The Tot!l O(tp(t )ro"(ce" In An Economy Gi&en Its $et Of eso(rces An" TheC(rrent $t!te Of Technology

8/20/2019 ECO 405 Week 9 Quiz


,>. ow #o 3o( C!lc(l!te The A&er!ge )ro"(ct Of L!%or?A. Tot!l (!ntity Of Inp(ts #i&i"e" y Tot!l O(tp(t. The A&er!ge +(m%er Of Wor6ers Times The A&er!ge Le&el Of O(tp(t )ro"(ce"C. Tot!l O(tp(t )ro"(ce" #i&i"e" y Tot!l Units Of L!%or Employe"

#. Tot!l Units Of L!%or Employe" #i&i"e" y The Tot!l O(tp(t )ro"(ce"E. The A&er!ge +(m%er Of L!%or Units Employe" Times The (!ntity Of C!pit!lEmploye"

,=. In An Economy/ 1:: Wor6ers C!n )ro"(ce 5:: Units Of O(tp(t An" 11: Wor6ers)ro"(ce 7:: Units Of O(tp(t. Which Of The Following Is ? The A&er!ge )ro"(ctWithA. 1:: Wor6ers Is 5::

. 1:: Wor6ers Is 5C. 11: Wor6ers Is 7::#. 1: Wor6ers Is 1::E. oth A An" C

,@. In An Economy/ 1: Wor6ers C!n )ro"(ce 5:: Units Of O(tp(t An" ': Wor6ers)ro"(ce =:: Units Of O(tp(t. Which Of The Following Is ? The A&er!ge )ro"(ctWithA. 1: Wor6ers Is 5::

. 1: Wor6ers Is 5C. ': Wor6ers Is =::#. ': Wor6ers Is ,::E. ': Wor6ers Is 4:.

4:. Wh!t Is Technology?A. The Tools Of )ro"(ction. The (m!n Inp(t Of )ro"(ction

C. Comp(ters/ o%ots/ An" F!ctories#. The *e!ns An" *etho"s Of )ro"(ctionE. The *i2 Of L!%or An" C!pit!l Use" In )ro"(ction

8/20/2019 ECO 405 Week 9 Quiz


41. Which Of The Following Is Cite" As Contri%(ting To The ecent $low"own InEconomic Growth?A. $lower !tes Of Technologic!l A"&!ncement. Ch!nges In Composition Of The L!%or Force

C. Low !tes Of $!&ing An" In&estment#. Go&ernment eg(l!tion An" )(%lic #e%tE. All Of The A%o&e

4'. ow !s The Incre!sing Import!nce Of The U.$. $er&ice $ector Contri%(te" ToThe $low"own In Economic Growth?A. $er&ices Are Less Import!nt To The Economy Th!n Goo"s. The )ro"(cti&ity Of The $er&ice $ector Is !r" To Acc(r!tely *e!s(re

C. *ost In&estment T!6es )l!ce In The Goo"s )ro"(cing $ector Of The Economy#. $er&ices C!nnot e E!sily E2porte" To Foreign +!tionsE. Technologic!l A"&!nces !&e !" A $m!ller Imp!ct On The $er&ice $ector

4,. Wh!t Is The Crow"ing O(t Effect?A. Cons(mption $pen"ing Is e"(ce" ec!(se Of $pen"ing On C!pit!l. C!pit!l $pen"ing Is e"(ce" ec!(se )eople )(rch!se Gre!t (!ntities OfCons(mer Goo"sC. )ri&!te In&estment Is e"(ce" ec!(se Go&ernment orrowing #i&erts #oll!rs

Aw!y#. Go&ernment $pen"ing Cre!tes A L!rger #em!n" For C!pit!l Goo"sE. $!&ings Is Ins(fficient To $(pport The Le&el Of C!pit!l In&estment In TheEconomy

44. Which Of The Following Is A )ro-Growth Economic )olicy?A. !ising The T!2 On C!pit!l G!ins. Enco(r!ging )eople To $!&e Less

C. e"(cing )(%lic #oll!rs A&!il!%le For E"(c!tion#. In&esting In (m!n C!pit!lE. +one Of The A%o&e

8/20/2019 ECO 405 Week 9 Quiz


45. ow *(ch #oes The Fe"er!l Go&ernment $pen" Ann(!lly On ese!rch An"#e&elopment?A. Less Th!n 1; Of G"p. A%o(t 1:; Of G"p

C. *ore Th!n '5; Of Its ("get#. HeroE. E2!ctly 5; Of Its ("get

47. Which Theories Concerning The (siness Cycle Foc(s On F!ctors O(tsi"e OfThe Economy?A. E2pect!tions Theories. In&entory Theories

C. E2ogeno(s Theories#. *onet!ry TheoriesE. Theories Of Inno&!tion

4>. The Economic Growth Of An Economy Is Gener!lly *e!s(re" y E2!miningCh!nges InA. Employment. e!l G"pC. Income

#. Go&ernment e&en(esE. C(rrent G"p

4=. Which Of The Following $t!tements Is ?A. The U.$. Economy Grew At A igher !te In The 1@=:s Th!n It #i" In The 1@7:s. The Le!"ing Economic In"ic!tors In"e2 Is Usef(l For )re"icting Economicecessions/ (t +ot Economic E2p!nsionsC. The Economist *ost Often Associ!te" With Theories Of Inno&!tion Use" To

E2pl!in (siness Cycles Is *ilton Frie"m!n#. A $m!ll e"(ction In Economic Growth C!n !&e L!rge Long-(n Effects One!l G"pE. All Of The A%o&e $t!tements Are

8/20/2019 ECO 405 Week 9 Quiz


4@. ow *!ny Complete (siness Cycles !s The U.$. E2perience" $ince 1@7:?A. >. 1C. 1'

#. 'E. ',

5:. el!ti&e To The )!st/ (siness Cycles In The U.$. Are ecomingA. $horter In #(r!tion. *ore $e&ereC. Longer In #(r!tion#. A An"

E. +on-E2istent

51. Which Of The Following Is esponsi%le For Offici!lly Tr!c6ing The In"e2 OfLe!"ing Economic In"ic!tors?A. The U.$. #ep!rtment Of Commerce. The Conference o!r"C. The (re!( Of L!%or $t!tistics#. The Co(ncil Of Economic A"&isorsE. The Fe"er!l eser&e o!r" Of Go&ernors

5'. Which Of The Following Is +ot A Component Of The In"e2 Of Le!"ingEconomic In"ic!tors?A. $toc6 *!r6et )rices. An In"e2 Of Cons(mer E2pect!tionsC. +ew (il"ing )ermits Gr!nte"#. e!l *oney $(pplyE. +one Of The A%o&e. All Are )!rt Of The In"e2

8/20/2019 ECO 405 Week 9 Quiz


5,. In esponse To An Economic ecession/ *onet!ry Theories Of The (sinessCycle )re"ict Th!t The Fe"er!l eser&e Wo(l"A. Incre!se The $(pply Of *oney To Cre!te An E2p!nsion. e"(ce The $(pply Of *oney To Cre!te An E2p!nsion

C. !ise Interest !tes To Incre!se e!l Economic Growth#. Incre!se The #em!n" For *oney To ring A%o(t Economic GrowthE. Lower T!2es To A&oi" A F(ll #epression

54. Which F!mo(s Economist Is Associ!te" With The $(nspot Theory Of (sinessCycles?A. Doseph $ch(mpeter . *ilton Frie"m!n

C. Willi!m $t!nley De&ons#. Dohn *!yn!r" eynesE. Ch!rles Al!n egister

55. Which $et Of Theories C!n e Use" To E2pl!in All (siness Cycles?A. E2ogeno(s Theories. Theories Of Inno&!tionC. In&entory Theories#. *onet!ry Theories

E. +one Of The A%o&e. +o One Theory C!n E2pl!in E&ery (siness Cycle

57. For An Economy To E2p!n" Its In&estment In The )ro"(ction Of C!pit!l Goo"s/It *(stA. Enh!nce Its C(rrent Le&el Of Technology. Forego $ome )ro"(ction Of Cons(mer Goo"s An" $er&icesC. E2p!n" Its Geogr!phic Territory#. Incre!se Its e!l $(pply Of *oney

E. e"(ce The Le&el Of $!&ings y Cons(mers

5>. The (!ntity Of C!pit!l In The U.$. Economy !s Grown At A !te BBBBBBBBThe Growth In The L!%or Force.A. $lower Th!n. A%o(t The $!me AsC. F!ster Th!n#. Only !lf As *(ch AsE. Un6nown

8/20/2019 ECO 405 Week 9 Quiz


5=. (m!n C!pit!l efers ToA. Foregone E!rnings Of $t("ents Enrolle" In College. *oney e8(ire" To Enroll In E"(c!tion!l )rogr!msC. $l!&es Owne" y C!pit!lists#. $6ills An" Tr!ining Th!t Incre!se A Wor6er<s )ro"(cti&ity

E. F!ctories An" E8(ipment Owne" y Wor6ers

5@. The First #ec!"e Of The '1st Cent(ry !s een Ch!r!cteri0e" y BBBBBB.A. A ooming Economy Thro(gh The )erio". A ecession At The $t!rt Of The #ec!"e/ Followe" y A $low eco&ery An"Then A $econ" ecessionC. $t!gfl!tion#. One ecession Followe" y An Unprece"ente" Economic oomE. +one Of The A%o&e

7:. Which Of The Following $t!tements Is ?A. In The Foresee!%le F(t(re/ e!l G"p Will Grow $lower Th!n The U.$. )op(l!tion. !se" On )!st Economic )erform!nce/ It Is Li6ely Th!t $t!n"!r"s Of Li&ing InThe U.$. Will F!ll #(ring The E!rly )!rt Of The '1st Cent(ryC. e!l )er C!pit! G"p Will Li6ely Incre!se In The +e!r F(t(re #(e In )!rt To The$low"own In The !te Of )op(l!tion Growth#. In Economics/ The )!st Is A ery )oor )re"ictor Of The F(t(re

E. The !te Of Economic Growth #oes +ot Affect In"i&i"(!l )eople

8/20/2019 ECO 405 Week 9 Quiz


(estions 71 - 75 efer To The Gr!ph elow.

71. An Economy<s )ro"(ction )ossi%ilities C(r&e Will $hift O(t The F!rthest In ':1>If It Chooses To Oper!te At Which )oint In ':1'?A. A. C. C#. FE. E

7'. An Incre!se In L!%or eso(rces Will C!(se Which Of The Following $hifts OnThe Gr!ph?A. f To Ag. Ag To f C. # To C#. C To #E. # To E

8/20/2019 ECO 405 Week 9 Quiz


7,. Economic Growth Is epresente" On The Gr!ph As A *o&ement FromA. f To Ag. Ag To f C. # To C

#. C To #E. # To E

74. An Incre!se In )ro"(cti&ity Is Consistent With Which Of The Following*o&ements?A. f To Ag. Ag To f C. # To C

#. C To #E. # To E

75. A *o&ement From )oint # To )oint C Is Consistent WithA. An Incre!se In C!pit!l Goo"s Witho(t A #ecre!se In Cons(mer Goo"s. Technologic!l Ch!nge etween ':1' An" ':1>C. An Incre!se In )ro"(cti&ity etween ':1' An" ':1>#. All Of The A%o&eE. +one Of The A%o&e

8/20/2019 ECO 405 Week 9 Quiz


(estions 77 - >: efer To The Gr!ph elow.

77. An Economic E2p!nsion Is Ill(str!te" On The Gr!phA. At )oint T'

. At )oint T,

C. etween T1 An" T'

#. etween T'

An" T,

E. Along The $tr!ight Line

7>. An Economic Contr!ction Is Ill(str!te" On The Gr!phA. At )oint T'

. At )oint T,

C. etween T1 An" T'

#. etween T' An" T,


8/20/2019 ECO 405 Week 9 Quiz


7=. A )e!6 In The (siness Cycle Is Ill(str!te" On The Gr!phA. At )oint T'

. At )oint T,

C. etween T1 An" T'

#. etween T' An" T,


7@. A Tro(gh In The (siness Cycle Is Ill(str!te" On The Gr!phA. At )oint T'

. At )oint T,

C. etween T1 An" T'

#. etween T' An" T,


>:. The $tr!ight Line On The Gr!ph epresentsA. An Economic E2p!nsion. An Economic Contr!ctionC. A (siness Cycle#. A Long-(n Growth Tren"E. A oom )erio"

>1. The Longest $(st!ine" )erio" Of Economic Growth In *o"ern U.$. istoryOcc(rre" #(ring TheA. 1@':s. 1@5:sC. 1@7:s#. 1@=:sE. 1@@:s

8/20/2019 ECO 405 Week 9 Quiz


>'. Which Of The Following F!ctors W!s +ot One Of The e!sons Why A ecession$t!rte" In '::=?A. The Coll!pse Of A $pec(l!ti&e (%%le In The e!l Est!te *!r6et. A $pi6e In Interest !tes

C. A $ignific!nt ise In The Worl" )rice Of Oil#. A $eries Of Fin!nci!l Fr!(" $chemes In The Fin!nci!l In"(stryE. All Of The A%o&e

>,. The #ecline Th!t Occ(rre" In e!l G"p In The Fo(rth (!rter Of '::= W!s

BBBBBBBB .A. The $m!llest #ecre!se On ecor". The A&er!ge e"(ctionC. $m!ller Th!n The #ecre!se In The Thir" (!rter#. The L!rgest In O&er 5: 3e!rsE. There W!s +o #ecline In e!l G"p #(ring '::=

>4. Which Of The Following Contri%(te" To The Infl!tion-Free Economic E2p!nsionOf The 1@@:s An" E!rly ':::s?A. Fe" )olicies To !ise Interest !tes. An Incre!se In Aggreg!te $(pplyC. Impro&ements In )ro"(cti&ity#. Impro&ements In TechnologyE. All Of The A%o&e

>5. )ro"(cti&ity G!ins In The 1@@:s Were A es(lt Of Which Of The Following?A. C!pit!l In&estment. Impro&e" L!%or (!lityC. Technologic!l )rogress#. Incre!se" Use Of Comp(tersE. All Of The A%o&e

>7. $!&ing In An Economy Is Import!nt For Economic Growth ec!(seA. If o(sehol"s #on<t $!&e/ They C!nnot Cons(me In The F(t(re. Witho(t $!&ing/ Aggreg!te #em!n" Incre!sesC. One )erson<s $!&ing Is Another )erson<s Cons(mption#. It Is The $o(rce Of F(n"s For In&estmentE. Of +one Of The A%o&e $!&ing Is +ot Import!nt For Economic Growth

8/20/2019 ECO 405 Week 9 Quiz


>>. Which Of The Following Is +ot $omething Th!t Will Incre!se EconomicGrowth?A. E2pen"it(res On ese!rch An" #e&elopment. Incre!se" E"(c!tion

C. Using eso(rces To #e&elop A""ition!l C!pit!l#. epl!cing Ol" *!chineryE. All Of The A%o&e Will Incre!se Economic Growth

>=. Accor"ing To e!l (siness Cycle Theory/ The )rim!ry F!ctor Th!t Incre!sesAggreg!te $(pply IsA. $!&ings. Incre!ses In The $i0e Of The L!%or Force

C. Technologic!l Impro&ements#. Go&ernment $pen"ingE. e"(ctions In eg(l!tion

rue ' 3alse Questions

>@. Economic Growth Is +ecess!ry To Cre!te +ew Do%s/ Incre!se Incomes/ An" !ise

$t!n"!r"s Of Li&ing.

=:. Economic Growth Is An Import!nt $oci!l Iss(e/ (t It Is +ot el!te" To Other)ro%lems $(ch As Unemployment An" )o&erty.

=1. Economists Consi"er Economic Growth As A $hort-(n )rocess.

='. etween 1@7: An" The *i"-1@@:s/ The Americ!n Economy *ore Th!n Triple"Its Le&el Of e!l G"p.

8/20/2019 ECO 405 Week 9 Quiz


=,. #(ring The )!st Three #ec!"es/ The U.$. Economy E2perience" $ignific!nt)erio"s Of Growth Witho(t Interr(ption.

=4. E&en $m!ll #ifferences In Growth !tes C!n es(lt In $ignific!nt G!ps In G"petween Two Co(ntries O&er The Long (n.

=5. Economic Growth Compo(n"s O&er Time.

=7. The U.$. Economy !s +e&er E2perience" A 3e!r Of +eg!ti&e EconomicGrowth.

=>. U.$. Economic Growth !tes In The 1@@:s !&e een igher Th!n Those

E2perience" In The 1@7:s.

==. An Err!tic $hort-(n Fl(ct(!tion In Economic Acti&ity Aro(n" The Long-(nTren" Is C!lle" A (siness Cycle.

=@. E&ery (siness Cycle !s Fo(r #istinct )h!ses E2p!nsion/ )e!6/ Contr!ction/An" Tro(gh.

@:. $trong Economic E2p!nsions Are $ometimes eferre" To As Economic ooms.

8/20/2019 ECO 405 Week 9 Quiz


@1. Another +!me For The Tro(gh Of A (siness Cycle Is ecession.

@'. E!ch )h!se Of A (siness Cycle !s Appro2im!tely The $!me #(r!tion.

@,. $ince Wwii/ The A&er!ge Length Of A Typic!l U.$. (siness Cycle IsAppro2im!tely 7: *onths.

@4. Gi&en *o"ern #!t! Collection Techni8(es/ It Is ery E!sy To I"entify When TheEconomy Is A%o(t To *o&e Into The +e2t )h!se Of A (siness Cycle.

@5. In The U.$./ The Offici!l #!tes For E!ch )h!se Of A (siness Cycle Are#etermine" After The F!ct y The +!tion!l (re!( Of Economic ese!rch +%er.

@7. The In"e2 Of Le!"ing Economic In"ic!tors Is Use" y Economists To Forec!stCh!nges In Economic )erform!nce O&er Time.

@>. The Components Of The In"e2 Of Le!"ing Economic In"ic!tors Ten" To Ch!nge)rior To Ch!nges In The Economy As A Whole.

@=. The Components Of The In"e2 Of Le!"ing Economic In"ic!tors Le!" Ch!nges InThe Aggreg!te Economy/ (t *o&e In An Opposite #irection.

8/20/2019 ECO 405 Week 9 Quiz


@@. Economists !&e Agree" Upon One Wi"ely Accepte" Theory To E2pl!in(siness Cycle eh!&ior.

1::. E2pect!tions A%o(t The F(t(re Infl(ence The Economic #ecisions Th!t )eople*!6e To"!y.

1:1. Doseph $ch(mpeter Theori0e" Th!t (siness Cycles Were #etermine" )rim!rilyy Long-(n W!&es Of Inno&!tion.

1:'. *onet!ry Theories Of (siness Cycles Are !se" On ow The Fe"er!l eser&e*!n!ges The *oney $(pply In esponse To Ch!nging Economic Con"itions.

1:,. e!l (siness Cycle Theorists )ost(l!te Th!t Economic Fl(ct(!tions Are)rim!rily #(e To Ch!nges In Aggreg!te #em!n".

1:4. De&ons< $(nspot Theory Of The (siness Cycle Is Wi"ely Use" y EconomistsTo"!y To Forec!st F(t(re Le&els Of Economic Acti&ity.

1:5. The )rim!ry #etermin!nts Of Economic Growth Incl("e The A&!il!%ility Ofeso(rces An" )ro"(cti&ity F!ctors.

8/20/2019 ECO 405 Week 9 Quiz


1:7. As An Economy<s L!%or Force Incre!ses In $i0e/ Its )ro"(ction )ossi%ilitiesFrontier $hifts O(tw!r".

1:>. The U.$. L!%or Force !s +ot Grown $(%st!nti!lly #(ring The )!st Fo(r#ec!"es.

1:=. The Term In&estment Is Use" To #escri%e The )(rch!se Of Cons(mer Goo"s yo(sehol"s In The Economy.

1:@. In&estments In C!pit!l Goo"s Incre!se An Economy<s A%ility To )ro"(ceCons(mer Goo"s In The F(t(re.

11:. In ecent 3e!rs/ C!pit!l !s Grown At A $lower !te Th!n The L!%or ForceWithin The U.$. Economy.

111. )ro"(cti&ity Is A *e!s(re Of ow Efficiently eso(rces Are Con&erte" IntoGoo"s An" $er&ices Thro(gh A )ro"(ction )rocess.

11'. The Tot!l O(tp(t )ro"(ce" #i&i"e" y The Tot!l Units Of L!%or Employe" IsC!lle" The A&er!ge )ro"(ct Of L!%or.

11,. )ro"(cti&ity Is +ot Infl(ence" y The L!w Of #iminishing et(rns.

8/20/2019 ECO 405 Week 9 Quiz


114. The A&er!ge Le&el Of E"(c!tion!l Att!inment In The U.$. !s een Gr!"(!lly#eclining $ince The *i"-1@>:s.

115. Technology efers To The *e!ns An" *etho"s Of )ro"(ction.

117. On A&er!ge/ The U.$. Economy !s Grown A%o(t ,.1'; Ann(!lly $ince 1@7:.

11>. The U.$. Economy Grew At A F!ster !te In The 1@=:s el!ti&e To The 1@7:s.

11=. In The 1@@:s/ The U.$. Economy Grew At An A&er!ge Ann(!l !te Of Only'.1;.

11@. The !te Of Technologic!l Growth In The U.$. Economy Is igher To"!y Th!nIt W!s In The 1@7:s.

1':. C!pit!l Acc(m(l!tion In An Economy Is #epen"ent Upon $!&ers To )ro&i"e

F(n"s For In&estors.

1'1. The Incre!sing Import!nce Of The $er&ice $ector In The Americ!n Economy*!y Le!" To An O&erestim!tion Of Economic Growth.

8/20/2019 ECO 405 Week 9 Quiz


1''. $ome Forms Of Go&ernment eg(l!tion Of (siness *!y e"(ce )ro"(cti&ityAn" Therefore Contri%(te To The $low"own Of Economic Growth.

1',. Crow"ing O(t Occ(rs When Go&ernment orrowing To Fin!nce Its #e%t#i&erts F(n"s Aw!y From The )ri&!te $ector.

1',. The $i0e Of The Americ!n Economy Will #o(%le Within The +e2t Ten 3e!rs.

1'5. C(rrently/ The )op(l!tion Of The U.$. Is Growing At A F!ster !te Th!n e!lG"p Is Growing.

1'7. To $tim(l!te A""ition!l Economic In&estment/ $ome )olicy *!6ers F!&or

Incre!sing The T!2 !te On C!pit!l G!ins.

1'>. Go&ernment )olicies Th!t $(%si"i0e igher E"(c!tion $ho(l" $tim(l!te L!%or)ro"(cti&ity An" Enh!nce Long-(n Economic Growth.

1'=. The U.$. Go&ernment $pen"s Less Th!n 1; Of G"p On ese!rch An"#e&elopment E!ch 3e!r.

1'@. In Economics/ The )!st Is A ery )oor )re"ictor Of The F(t(re.

8/20/2019 ECO 405 Week 9 Quiz


1,:. The $low"own In The !te Of )op(l!tion Growth !s Incre!se" The Growth!te In The e!l )er C!pit! G"p For The U.$.

1,1. The !te Of Economic Growth Affects E&eryone Li&ing In An Economy.

1,'. *ost Economic Forec!sts Of The +e!r F(t(re )re"ict Th!t The $t!n"!r" OfLi&ing In The Unite" $t!tes Will F!ll.

1,,. One $tr!tegy To )romote Economic Growth Is To Enco(r!ge )eople To $!&e*ore.

1,4. $!&ings C!n Only Occ(r When The Economy Is In The E2p!nsion )h!se Of A

(siness Cycle.

1,5. A e"(ction In $!&ings Will Le!" To A e"(ction In The Le&el Of In&estment.

1,7. The A&er!ge Ann(!l !te Of Growth For The U.$. Economy #(ring TheTwentieth Cent(ry W!s etween ,; An" ,.5;.

1,>. The *ost Import!nt #etermin!nts Of Economic Growth Are The A&!il!%ility Ofeso(rces An" )ro"(cti&ity F!ctors.

8/20/2019 ECO 405 Week 9 Quiz


1,=. Close E2!min!tion Of The ecent istory Of e!l G"p In The U.$. e&e!lsTh!t The !te Of Economic Growth !s een #iminishing O&er Time.

Cha%ter .+

$oney Bankin n# he 3inancial Syste,& Ol# Pro(le,s With 6ew wists

$ulti%le Choice Questions

1. Commerci!l !n6s Oper!teA. y Attr!cting #eposits An" *!6ing Lo!ns

. oth )!y An" Ch!rge InterestC. y Eng!ging In Fin!nci!l Interme"i!tion#. All Of The A%o&eE. Un"er The Control Of $t!te Go&ernments

'. Commerci!l !n6sA. Attr!ct #eposits y Offering To )!y Interest. $ell +ew Iss(es Of $toc6s An" on"C. Oper!te On A +on-)rofit !sis#. Attr!ct #eposits y Offering Free To!sters

E. +one Of The A%o&e

,. Commerci!l !n6sA. $t!rte" y Offering Cre"it To We!lthy L!n"owners. eg!n As Gol"smiths Th!t )ro&i"e" eceipts To C(stomers Who $tore" TheirGol" With The Gol"smithC. Oper!te In oth The )rim!ry An" $econ"!ry Fin!nci!l *!r6ets#. Oper!te Only In Cities With *!Jor Fin!nci!l *!r6etsE. eg!n In Germ!ny

4. A Fin!nci!l Interme"i!ryA. $ee6s #eposits. *!6es Lo!nsC. *!tches Up $!&ers An" orrowers#. All Of The A%o&eE. Oper!tes In etween Two !n6s

8/20/2019 ECO 405 Week 9 Quiz


5. In&estment !n6sA. *!6e Lo!ns To In"i&i"(!l o(sehol"s To (y o(ses An" C!rs. Wor6 With Corpor!tions To Fin!nce Their Oper!tions Thro(gh )rim!ry Fin!nci!l*!r6etsC. Wor6 With Corpor!tions To Fin!nce Their Oper!tions Thro(gh $econ"!ry

Fin!nci!l *!r6ets#. Wor6 With In&estments From )ri&!te In"i&i"(!lsE. +one Of The A%o&e

7. A $toc6 IsA. A Fin!nci!l Instr(ment Th!t )ro&i"es Ownership ights To $h!rehol"ers. A Fin!nci!l Instr(ment Th!t )ro&i"es Ann(!l )!yments Of InterestC. A Fin!nci!l Instr(ment Th!t Is Tr!"e" Only In )rim!ry Fin!nci!l *!r6ets#. A Fin!nci!l Instr(ment Th!t Is o(ght An" $ol" y Commerci!l !n6sE. All Of The A%o&e

>. A #i&i"en"A. *(st e )!i" y A Commerci!l !n6s. *(st e )!i" y Corpor!tions To Owners Of The Comp!nyKs $toc6 C. Is A #istri%(tion Of A Corpor!tionKs )rofits To $toc6hol"ers#. Is A Fin!nci!l Instr(ment Th!t Is o(ght An" $ol" y Commerci!l !n6sE. +one Of The A%o&e

=. Corpor!tions !ise F(n"s InA. The *oney *!r6et. The )rim!ry Fin!nci!l *!r6etC. The $econ"!ry Fin!nci!l *!r6et#. oth The )rim!ry An" $econ"!ry Fin!nci!l *!r6etsE. +one Of The A%o&e

@. When A )erson (ys A $toc6 On A $toc6 E2ch!nge They Are )!rticip!ting InA. The *oney *!r6et. The )rim!ry Fin!nci!l *!r6etC. The $econ"!ry Fin!nci!l *!r6et#. oth The )rim!ry An" $econ"!ry Fin!nci!l *!r6etsE. +one Of The A%o&e

8/20/2019 ECO 405 Week 9 Quiz


1:. Ins(r!nce )oliciesA. e8(ire An Initi!l/ One-Time )!yment y )olicy ol"ers (t +o F(rther O(tl!y. *!6e )!yments To )olicy ol"ers On A *onthly !sisC. e8(ire A eg(l!r )!yment Of Ins(r!nce )remi(ms y )olicy ol"ers#. e8(ire An Initi!l )!yment An" eg(l!r )!yments Of Ins(r!nce )remi(ms y

)olicy ol"ersE. +one Of The A%o&e

11. The Fin!nci!l Crisis Of '::= Affecte"A. Only Commerci!l !n6s. Only In&estment !n6sC. Only Ins(r!nce Comp!nies#. All Of The A%o&eE. The e&en(es Of Only $t!te Go&ernments

1'. In The E!rly 3e!rs Of The Americ!n ep(%lic/ The First !n6 Of The Unite"$t!tes W!s Est!%lishe" Thro(gh The Efforts OfA. Thom!s Defferson. George W!shingtonC. D!mes *!"ison#. Ale2!n"er !miltonE. A!ron (rr

1,. #(ring *ost Of The 1=::s/ The Fe"er!l *onet!ry A(thority W!s C!lle"A. The !n6 Of Americ!. The !n6 Of W!shingtonC. The First +!tion!l !n6 #. The Thir" !n6 Of The Unite" $t!tesE. +one Of The A%o&e

14. Thro(gho(t The istory Of The U.$./ Until The Cre!tion Of The Fe"er!l eser&e$ystem In 1@1,/ The *onet!ry $ystem W!sA. Ch!r!cteri0e" y A $eries Of )!nics An" )erio"s Of Inst!%ility. Un"er The Control Of The $econ" !n6 Of The Unite" $t!tesC. The )ro"(ct Of The Wor6 Of )resi"ent An"rew D!c6son#. !se" Upon The English $ystem

E. Un"er The $(per&ision Of The Us *int

8/20/2019 ECO 405 Week 9 Quiz


15. )rior To The Cre!tion Of The Fe"er!l eser&e $ystem/ The *oney $(pplyA. W!s ery $t!%le An" ighly !l(e". W!s Comprise" Of C(rrency )rinte" y The #ep!rtment Of The Tre!s(ryC. W!s )ro"(ce" y Loc!l !n6s An" Often Tr!"e" At A #isco(nt#. W!s A&!il!%le Only To !n6 #epositors

E. W!s Comprise" Of Gol"

17. *oney $er&es AsA. A Unit Of Acco(nt. A $tore Of !l(eC. A *e"i(m Of E2ch!nge#. All Of The A%o&eE. An Em%lem Of )erson!l We!lth 1>. When 3o( Use #oll!r ills To )!y For A )(rch!se At A $tore/ *oney Is $er&ing

Which F(nction?A. A *e"i(m Of E2ch!nge. A *e!s(re Of !l(eC. A $tore Of !l(e#. A !rter F!cilit!tor E. All Of The A%o&e 1=. When 3o( Comp!re A #oll!r<s Worth Of Apples To A #oll!r<s Worth Of Or!nges/*oney Is $er&ing Which F(nction?A. A *e"i(m Of E2ch!nge. A *e!s(re Of !l(eC. A $tore Of !l(e#. A !rter F!cilit!tor E. A *e!s(re Of We!lth 1@. If 3o( eep $ome C!sh In A $!fe )l!ce $o Th!t 3o( !&e It To Use L!ter/*oney Is $er&ing Which F(nction?A. A *e"i(m Of E2ch!nge. A *e!s(re Of !l(eC. A $tore Of !l(e#. A !rter F!cilit!tor

E. All Of The A%o&e

8/20/2019 ECO 405 Week 9 Quiz


':. !n6ing eg(l!tion Is Inten"e" To )re&entA. !n6 F!il(res. E2cess !n6 )rofitsC. !n6 Losses#. !n6s From $elling $ec(rities

E. !n6ing *onopolies '1. The Gr!mm-Le!ch-liley Act Allows !n6s ToA. $ell Ins(r!nce. Un"erwrite Ins(r!nceC. $ell $ec(rities#. In&est In e!l Est!teE. #o All Of The A%o&e ''. *oney Is Li8(i" ec!(seA. It Loses !l(e With Infl!tion

. Coins C!n e *elte" To Use Their *et!l To *!6e Goo"sC. It $er&es As A *e!s(re Of !l(e#. It #oes +ot !&e To e $ol" To (y Goo"s An" $er&icesE. It Is A !l(!%le Asset ',. Which Of The Following Is Of A Fr!ction!l eser&e !n6ing $ystem?A. !n6s *(st ol" All Of #epositors< #eposits In Their !(lts. !n6ing Is Only A Fr!ction Of The $er&ices !n6s )ro&i"e To Their C(stomersC. !n6s Len" O(t )!rt Of Their #epositors< #eposits#. The eser&e !tio Is 1::;E. !n6s *!y +ot ol" E2cess eser&es

'4. If The eser&e !tio Is 1:; An" A +ew #em!n" #eposit Of 91:/::: Is *!"e/Wh!t Is The *!2im(m #eposit Cre!tion )ossi%le?A. 91/:::. 9@/:::C. 91:/:::#. 9@:/:::E. 91::/:::

'5. If The eser&e !tio Is 1:; An" A +ew #em!n" #eposit Of 95/::: Is *!"e/Wh!t Is The *!2im(m #eposit Cre!tion )ossi%le?A. 95::. 94/5::C. 95/:::#. 945/:::E. 95:/:::

'7. If The eser&e !tio Is ':; An" A +ew #em!n" #eposit Of 91:/::: Is *!"e/Wh!t Is The *!2im(m #eposit Cre!tion )ossi%le?

8/20/2019 ECO 405 Week 9 Quiz


A. 91/5::. 91:/:::C. 915/:::#. 94:/:::E. 95:/:::

'>. *oney #oes +ot $er&e As AA. *e"i(m Of E2ch!nge. $tore Of !l(eC. *e!s(re Of !l(e#. )rice In"e2E. It $er&es As All Of The A%o&e '=. *1 Incl("esA. C(rrency An" Coins In Circ(l!tion/ Tr!&eler<s Chec6s/ #em!n" #eposits AtCommerci!l !n6s/ An" Other Chec6!%le #eposits

. C(rrency An" Coins In Circ(l!tion/ All #em!n" #eposits/ An" All Time #epositsC. All #em!n" #eposits An" All Time #eposits#. D(st C(rrency An" Coins In Circ(l!tionE. +one Of The A%o&e '@. !n6s *!6e Lo!ns From TheirA. e8(ire" eser&es. E2cess eser&esC. +et Worth#. U.$. Go&ernment $ec(ritiesE. +one Of The A%o&e

,:. Which Of The Following Is Among The Assets Of A Commerci!l !n6?A. #em!n" #eposits. +et WorthC. Any Li!%ility#. Lo!ns An" In&estmentsE. Time #eposits ,1. *' Incl("es

A. *1/ )l(s $!&ings An" Time #eposits Of $m!ll #enomin!tion/ An" *oney *!r6et*(t(!l F(n"s. *1 )l(s $!&ings An" Time #eposits Of L!rge #enomin!tion O&er 91::/:::C. *1 )l(s !n6s Accept!nces An" Tre!s(ry ills#. *1 )l(s C(rrency An" #em!n" #epositsE. +one Of The A%o&e ,'. The !sic *oney $(pply IsA. Compose" Of $m!ll #enomin!tion Time #eposits )l(s Coin An" C(rrency el"y The +on%!n6 )(%lic. Compose" Of Assets Th!t Are Completely Li8(i" An" E!sily Accessi%le

C. O(r ro!"est *e!s(re Of *oney

8/20/2019 ECO 405 Week 9 Quiz


#. $imply The Coins An" C(rrency el" y The +on%!n6 )(%licE. +one Of The A%o&e ,,. E2cess eser&es efer ToA. eser&es Th!t !n6s Are e8(ire" y L!w To ol"

. The *!Jor Assets Of The !n6 C. eser&es A !n6 ol"s In C!se Of Une2pecte" C!se +ee"s#. eser&es O&er An" A%o&e The !n6<s e8(ire" eser&esE. +one Of The A%o&e

,4. The *oney *(ltiplier IsA. 1 . Er C. E#. E E. 1M1Er

,5. $(ppose The Leg!l eser&e e8(irement Is :.':/ An" A !n6 !s E2cesseser&es Of 91/:::/:::. The Ultim!te Incre!se In The *oney $(pply Will eA. 9'/:::/:::. 9'::/:::C. 9=::/:::#. 95/:::/:::E. 95::/::: ,7. The Infl!tion !te An" The Growth In The *oney $(pply AreA. Us(!lly In&ersely el!te". Us(!lly #irectly el!te"C. +e&er #irectly el!te"#. +ot el!te" To One Another E. +eg!ti&ely el!te" ,>. Who Controls The Aggreg!te ol(me Of #em!n" #eposits In The !n6ing$ystem?

A. The U.$. Tre!s(ry. The Fe"er!l eser&e o!r" Of Go&ernorsC. Congress#. !n6ersE. The )resi"ent Of The Unite" $t!tes ,=. To e"(ce Infl!tion!ry )ress(res/ The Fe"er!l eser&e A(thorities $ho(l"A. $ell Go&ernment $ec(rities/ !ise eser&e e8(irements/ An" Lower The#isco(nt !te. $ell Go&ernment $ec(rities/ Lower eser&e e8(irements/ An" Lower The#isco(nt !te

C. (y The Go&ernment $ec(rities/ !ise eser&e e8(irements/ An" !ise The#isco(nt !te

8/20/2019 ECO 405 Week 9 Quiz


#. $ell Go&ernment $ec(rities/ !ise eser&e e8(irements/ An" !ise The #isco(nt!teE. (y Go&ernment $ec(rities/ #ecre!se eser&e e8(irements/ #ecre!se The#isco(nt !te

,@. If The Open *!r6et Committee Of The Fe"er!l eser&e $ells $ec(rities/ ThisAction WillA. #ecre!se The *oney $(pply. Incre!se The *oney $(pplyC. e"(ce The eser&e e8(irement#. #ecre!se The #isco(nt !teE. #o +one Of The A%o&e

4:. When A Centr!l !n6 W!nts To Incre!se The *oney $(pply/ ItA. $ells on"s. (ys on"sC. $ells Goo" An" $er&ices#. (ys Goo"s An" $er&icesE. #oes +one Of The A%o&e 41. The Fe"er!l eser&e C!n #ecre!se The $(pply Of *oney yA. $elling U.$. Go&ernment $ec(rities. (ying U.$. Go&ernment $ec(ritiesC. $elling Goo"s An" $er&ices#. (ying Goo"s An" $er&icesE. #ecre!sing The eser&e e8(irement

4'. The Fe"er!l Open *!r6et Committee Fomc Is ighly Concerne" WithA. The +!tion!l Unemployment !te. The Growth Of e!l G"pC. Interest !tes#. The Le&el Of The $toc6 *!r6et

E. All Of The A%o&e

4,. When The Open *!r6et Committee Fomc )(rch!ses Go&ernment $ec(rities/Their Actions Are An Attempt ToA. !ise Interest !tes. Lower Interest !tesC. e"(ce orrowing#. !ise The Infl!tion !teE. Infl(ence oters In The +e2t )resi"enti!l Election

44. When The Fe" Incre!ses The *oney $(pply/ It Gener!lly !s The Effect Of

A. *!6ing !n6s *ore )rofit!%le. Incre!sing The !l(e Of $toc6s

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C. Lowering Interest !tes#. Lowering The Infl!tion !teE. Incre!sing The $i0e Of !n6 #eposits

45. When The Fe" Wishes To Incre!se The *oney $(pply/ It C!n #o $o yA. )(rch!sing Go&ernment $ec(rities Thro(gh Open *!r6et Oper!tions. Lowering The #isco(nt !teC. e"(cing The eser&e e8(irement#. All Of The A%o&eE. Incre!sing The $i0e Of !n6 #eposits

(estions 47 - 4@ efer To The Gr!ph elow.

47. $(ppose Th!t The Fe" !s Incre!se" The *oney $(pply. This Is $hown In The#i!gr!m yA. 1 To :

. : To 1C. *s1

#. *s'

E. +one Of The A%o&e

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4>. !se" On The #i!gr!m/ The Opport(nity Cost Of *oney Is igher IfA. The Interest !te Is I:

. The Interest !te Is I1

C. The *oney $(pply Is C(r&e *s1

#. The *oney $(pply Is C(r&e *s'

E. The Opport(nity Cost Of *oney Is +ot $hown In The #i!gr!m

4=. A $hift From *s1 To *s' Wo(l" e The es(lt OfA. An Incre!se In Aggreg!te #em!n". An Incre!se In Aggreg!te $(pplyC. A #ecision y The Fe" To )(rch!se Go&ernment $ec(rities y The Fomc#. A #ecision y The Fe" To $ell Go&ernment $ec(rities y The FomcE. A Ch!nge In The $toc6 *!r6et

4@. If The Fe" W!nte" To $tim(l!te (siness In&estment/ It Co(l" #o $o yA. Incre!sing Interest !tes From I1 To I:

. #ecre!sing The *oney $(pply From *s' To *s1

C. Incre!sing The *oney $(pply From *s1 To *s'

#. !ising The eser&e e8(irementE. Incre!sing The #isco(nt !te

5:. The E8(!tion Of E2ch!nge IsA. *p N &. *& N )8C. * N )8#. ) N *&E. )& N m 51. The !l(e Of *oney !riesA. #irectly With The Interest !te. #irectly With The )rice Le&elC. #irectly With The ol(me Of Employment#. In&ersely With The )rice Le&elE. With +one Of The A%o&e

5'. Accor"ing To The E8(!tion Of E2ch!nge/A. The ight-!n" $i"e Will E8(!l The Left-!n" $i"e Only If elocity #oes +otCh!nge From 3e!r To 3e!r . elocity *(st e Const!ntC. An Incre!se In The (!ntity Of *oney Will Le!" To An Incre!se In The )riceLe&el/ Other Things Const!nt#. )rices C!nnot Ch!ngeE. All Of The A%o&e

5,. The (!ntity Theory Of *oney Emph!si0esA. Go&ernment T!2!tion )olicies

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. Go&ernment $pen"ing )oliciesC. L!%or )ro"(cti&ity#. Ch!nges In The *oney $(pplyE. +one Of The A%o&e

54. A ey Ass(mption In The (!ntity Theory Of *oney Is Th!tA. The $(pply Of *oney Is Incre!sing At A Const!nt !te The )rice Le&el Is $t!%le O&er Long )erio"s Of TimeC. The Le&el Of O(tp(t Of Goo"s An" $er&ices Ch!nges Fre8(ently In esponse ToCh!nges In elocity#. The elocity Of *oney Is Const!ntE. +one Of The A%o&e

55. The esi"enti!l o(sing *!r6et $!w em!r6!%le Incre!ses InA. o(sing )rices At The En" Of The 1@@:Ks An" Thro(gh The First !lf Of The':::Ks

. o(sing )rices At The En" Of The 1@=:Ks An" eginning Of The 1@@:KsC. Foreclos(re !tes At The En" Of The 1@@:Ks An" Thro(gh The First !lf Of The':::Ks#. Foreclos(re !tes At The En" Of The 1@=:Ks An" eginning Of The 1@@:KsE. oth A An" C

57. The Growth In The esi"enti!l e!l Est!te *!r6et Is L!rgely A )ro"(ct Of A. A L!rge Incre!se In The #em!n" For o(sing. An Une2pecte" Growth In Us )op(l!tionC. A #ecline In o(sing )rices#. A Tightening Of Go&ernment )olicies Th!t estrict omeownershipE. A #ecre!se In *ortg!ge A&!il!%ility

5>. The Fe"er!l +!tion!l *ortg!ge Associ!tion Or F!nnie *!e W!s Cre!te" ToA. *!6e *ortg!ges !r" To O%t!in

. *!6e *ortg!ges Less Li6ely To Go Into Foreclos(reC. *!6e A L!rger *!r6et In *ortg!ges y Est!%lishing A $econ"!ry Fin!nci!l*!r6et In *ortg!ges#. *!6e *ortg!ges A&!il!%le To +ew Immigr!nts To The UsE. +one Of The A%o&e

5=. A *ortg!ge !c6e" $ec(rity IsA. A $h!re Of Common $toc6 !se" Upon ome *ortg!ges. A Fin!nci!l Instr(ment Th!t e"(ces is6 y )ooling Together A L!rge +(m%erOf *ortg!ges Into One AssetC. A Fin!nci!l Instr(ment #e&elope" To e"(ce Li8(i"ity In The o(sing *!r6et

#. A Fin!nci!l Instr(ment Th!t Is The Com%in!tion Of Only $(%prime *ortg!gesE. All Of The A%o&e

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5@. A $(%prime *ortg!geA. *!"e O%t!ining A *ortg!ge E!sier For Low Income o(sehol"s. Is A *ortg!ge Th!t #oes +ot *eet The e8(irements For A Con&ention!l*ortg!ge

C. Is Us(!lly $tr(ct(re" As An A"J(st!%le !te *ortg!ge#. All Of The A%o&eE. Is +o #ifferent From A Con&ention!l *ortg!ge

7:. A Coll!ter!li0e" #e%t O%lig!tion Or C"oA. Is Gener!lly is6ier Th!n A $ingle #e%t Of An E8(!l !l(e. $ells For A Lower )rice Th!n e-$!les Of In"i&i"(!l *ortg!ges Th!t CompriseThemC. Is $ol" In The )rim!ry Fin!nci!l *!r6et#. Is A Fin!nci!l Instr(ment Th!t O%sc(res The Un"erlying is6s Of The *ortg!gesTh!t Comprise Them

E. Is Alw!ys A !" Fin!nci!l In&estment

71. The Interest !te On An A"J(st!%le !te *ortg!ge Arm IsA. $et To E8(!l The Fe" F(n"s !te. A"J(ste" On A #!ily !sisC. $et To ise At The En" Of E&ery 3e!r For The Life Of The *ortg!ge#. A"J(ste" )erio"ic!lly !se" Upon C(rrent *!r6et Con"itionsE. A"J(ste" !se" Upon The !l(e Of The o(se )(rch!se

7'. ome E8(ity Lo!nsA. Allow A ome Owner To ec!pt(re $ome Of The Incre!se In The !l(e Of Theirome Witho(t $elling The ome. A W!y For omeowners To Iss(e $toc6/ Or E8(ity/ In Their omeC. Only Use" When ome )rices Are Incre!sing#. A W!y For The *!r6et To Elimin!te )!per )rofitsE. +one Of The A%o&e

7,. esi"es omeowners/ Who Attempte" To )rofit From Incre!sing ome )rices#(ring The o(sing (%%le In The E!rly )!rt Of The ':::s?A. L!rge Corpor!tions. $pec(l!tors

C. Foreign In&estors#. In"i&i"(!ls Who !" Low IncomesE. All Of The A%o&e

74. A Cre"it #ef!(lt $w!pA. Is Wh!t !ppens When omeowners $w!p Their *ortg!ges With Their

+eigh%ors. Is A W!y For In&estors In Coll!ter!li0e" #e%t O%lig!tions Or C"oKs To *!6eE&en *ore *oneyC. Is A W!y For In&estors In Coll!ter!li0e" #e%t O%lig!tions Or C"oKs To e"(ceThe is6 Of An Incre!se In *ortg!ge Foreclos(res

#. Is A W!y For In&estors To Incre!se The is6s To omeownersE. E2ists Only In *!r6ets With $(%prime *ortg!ges

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75. Assets Th!t Are *!r6e" To *!r6etP Will e )rice" AtA. Their Origin!l )(rch!se )rice. Their Origin!l )(rch!se )rice Less The #epreci!tion Of The AssetC. A )rice Th!t Is E8(!l To The Origin!l )(rch!se )rice )l(s The !te Of Infl!tion

#. A )rice Th!t Is !se" Upon The AssetKs C(rrent *!r6et !l(eE. A )rice #etermine" In The $toc6 *!r6et

77. *!ny L!rge !n6s An" W!ll $treet In&estment Firms Got Into Fin!nci!l)ro%lems #(e ToA. In&estments In $(%prime *ortg!ges. e8(ire" )!yments On Cre"it #ef!(lt $w!psC. F!il(res Of Coll!ter!li0e" #e%t O%lig!tions es(lting From ome Foreclos(res#. !&ing To *!r6 #own A $ignific!nt +(m%er Of Their Assets #(e To The *!r6To *!r6etP Acco(nting e8(irement

E. All Of The A%o&e

7>. The Fe"er!l Go&ernment $teppe" In #(ring '::= To )re&ent $e&er!lCommerci!l !n6s An" In&estment !n6s From F!iling !se" Upon The I"e! Th!tA. They Were Too ig To F!ilP. Any (siness F!il(re Wo(l" (rt $h!rehol"ersC. These !n6s *!"e L!rge )olitic!l Contri%(tions An" This W!s A W!y For)olitici!ns To )!y Them !c6 #. Go&ernment Wo(l" *!6e L!rge )rofits y #oing $oE. +one Of The A%o&e

7=. In L!te '::=/ The Us Tre!s(ry #ep!rtment eg!nA. Closing !n6s Th!t Were +ot Following eg(l!tions. To Implement The Tro(%le" Asset elief )rogr!m T!rpC. !ising Interest !tes To $tim(l!te The Economy#. Eng!ging In Open *!r6et Oper!tionsE. To Implement The Opening Of A +ew !n6 Of The Unite" $t!tes

7@. E!ch Of The Following Is A Fin!nci!l Interme"i!ry E2ceptA. Commerci!l !n6s. In&estment !n6s

C. Ins(r!nce Comp!nies#. Cre"it UnionsE. All Of The A%o&e Are Fin!nci!l Interme"i!ries

>:. A C!pit!l G!in E2istsA. When One )olitic!l )!rty Incre!ses The +(m%er Of Its *em%ers In Congress. When An Interest )!yment Is *!"eC. When The )rice Of An Asset Goes Up#. When The )rice Of An Asset E2cee"s The )rice )!i" For ItE. When T!2es Are )!i" On The Asset

>1. Li8(i"ity Of An Asset Incre!ses When

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A. It Is E!sier To Con&ert The Asset Into C!sh. The AssetKs !l(e Is elow Its Origin!l )riceC. The Asset Is )(rch!se"#. The Asset #epreci!tesE. The Asset Is )(t On The *!r6et

>'. When A $h!re Of $toc6 Is $ol" On The +ew 3or6 $toc6 E2ch!nge/ It Is Tr!"e"A. In A )rime Fin!nci!l *!r6et. In A )rim!ry Fin!nci!l *!r6etC. For A )romise To )!y A Fi2e" et(rn#. To Another $toc6 E2ch!ngeE. In A $econ"!ry Fin!nci!l *!r6et

>,. The Fin!nci!l Crisis Th!t eg!n In '::= Is A es(lt Of All Of The FollowingE2ceptA. The (rsting Of The #ot.Com (%%le

. )ro%lems In The esi"enti!l e!l Est!te *!r6etC. Ch!nges In Acco(nting (les A%o(t Asset !l(!tion#. L!rge Firms T!6ing On Assets Whose !l(e W!s +ot Well #etermine"E. )olicies Th!t Allowe" *!ny Un8(!lifie" ome%(yers To ecei&e *ortg!ges Th!tThey Co(l" +ot )!y

>4. istoric!lly/ *!ny Commerci!l !n6s eg!n AsA. Coffee o(ses An" T!&erns Where $toc6s Were Tr!"e". Dewelry $tores Th!t $peci!li0e" In The $!le Of )recio(s $tonesC. (sinesses Th!t Eng!ge" In $m!ll Lo!ns#. Gol"smiths Th!t el" $tores Of Gol" For Their C(stomersE. +one Of The A%o&e

>5. An Incre!se In The eser&e e8(irement C!nA. #ecre!se Interest !tes. Incre!se Li8(i"ityC. #ecre!se The *oney $(pply#. Incre!se The *oney $(pplyE. #ecre!se The )rofits Of !n6s

rue ' 3alse Questions

>7. Commerci!l !n6s Are Fin!nci!l Interme"i!ries (t Ins(r!nce Comp!nies Are +ot.

>>. In&estment !n6s Assist Corpor!tions In Iss(ing $toc6s An" on"s In The)rim!ry Fin!nci!l *!r6et.

>=. $il&ersmiths ec!me !n6s When They $t!rte" Len"ing O(t *oney !se" UponThe E2cess $il&er Th!t They el" For Their C(stomers.

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>@. esi"enti!l e!l Est!te Is Gener!lly Consi"ere" To e *ore Li8(i" Th!n A$!&ings Acco(nt.

=:. The Us !s/ O&er Its istory/ !" Only One +!tion!l !n6/ Th!t Is/ A !n6 OfThe Unite" $t!tes.

=1. The *ost Import!nt F(nction Of *oney Is As A *e"i(m Of E2ch!nge.

='. If The $(pply Of *oney #ecre!ses/ The !l(e Of A #oll!r Incre!ses.

=,. The ey To The Fe"er!l eser&e<s Control O&er The *oney $(pply Is Its A%ilityTo Cre!te *oney y *!6ing Lo!ns.

=4. A Commerci!l !n6ing $ystem With E2cess eser&es !s The A%ility To Cre!te*oney In The y *!6ing Lo!ns.

=5. A Cre"it Union/ Unli6e A !n6/ Is +ot A Fin!nci!l Interme"i!ry/ $ince It Is ACooper!ti&e !n6ing ent(re.

=7. In The U.$. !n6ing $ystem/ The !tio Of A !n6<s eser&es An" ItsO(tst!n"ing #eposits Is Us(!lly Less Th!n One.

=>. #(ring Infl!tion!ry )erio"s/ The Fe"er!l eser&e $ho(l" Lower The #isco(nt!te $o Th!t *em%er !n6s *!y *ore E!sily O%t!in +ee"e" eser&es To En!%leThem To Incre!se Their Lo!ns.

==. The *oney $(pply Consists )rim!rily Of Gol"/ $il&er/ An" Other *et!ls el" yThe Go&ernment.

=@. *onet!ry )olicy efers To Control Of The *oney $(pply y The Fe"er!leser&e A(thorities.

@:. Appropri!te Fe"er!l eser&e Actions To Com%!t Infl!tion Are An Incre!se In The#isco(nt !te/ An Incre!se In The eser&e !tio An" The $!le Of Go&ernment$ec(rities.

8/20/2019 ECO 405 Week 9 Quiz


@1. The eser&e !tio Is The !te Of Interest Ch!rge" Commerci!l !n6s WhenThey orrow From The Fe"er!l eser&e.

@'. #(ring Infl!tion!ry )erio"s/ The Fe"er!l eser&e $ho(l" (y $ec(rities $o Th!t

Commerci!l !n6s Will !&e *ore eser&es To Lo!n O(t.

@,. One Of The *!in F(nctions Of !n6s Is To Cre!te *oney.

@4. When A !n6 *!6es A Lo!n To One Of Its C(stomers/ It Incre!ses Its Li!%ilities.

@5. The *!2im(m #em!n" #eposit Cre!tion )ossi%le From A +ew #eposit Is#eri&e" From The E8(!tion # N E Q 1.

@7. The #isco(nt !te Is The !tio Of #em!n" #eposits To eser&es Th!t !n6s!&e To *!int!in.

@>. )olicy Actions Th!t Affect Ch!nges In The Growth !te Of The *oney $(pplyTo eep Interest !tes At Le&els Th!t )romote Economic $t!%ility An" Growth AreC!lle" Fine T(ning )olicies.

@=. The Iss(e Of The Appropri!te *onet!ry )olicy T!rget !s een esol&e" To The$!tisf!ction Of All )olicy *!6ers.

@@. The (!ntity Theory Of *oney $t!tes Th!t Incre!ses In The *oney $(pplyC!(se Incre!ses In oth The )rice Le&el An" O(tp(t.

1::. A Cre"it Union Is A Cooper!ti&e !n6ing ent(re Where The *em%ers OrOwners Of The Org!ni0!tion !&e A Common Employer Or Union.

1:1. The *!in )(rpose Of The Fe" Is To Control The !te Of Interest.

1:'. The Ann(!l Growth !te In The *oney $(pply !s een el" Const!nt y TheFe"er!l eser&e.

1:,. The (!ntity Theory Of *oney $tresses The Import!nce Of The elocity Of*oney.

8/20/2019 ECO 405 Week 9 Quiz


1:4. The *oney *(ltiplier Is #eri&e" From The Leg!l eser&e e8(irement.

1:5. An Incre!se In The $(pply Of *oney Will #ecre!se Interest !tes.

1:7. The Fe"er!l eser&e Open *!r6et CommitteeKs )rim!ry F(nction Is To Open +ew !n6s.

1:>. The #isco(nt !te Ch!rge" y The Fe"er!l eser&e/ Is Lower For *oreCre"itworthy !n6s.

1:=. Any Time The #isco(nt !te Incre!ses/ The *oney $(pply Also Incre!ses.

1:@. If The e8(ire" eser&e !tio Is Incre!se" y The Fe"/ One Co(l" Ass(meTh!t The Fe" Is Attempting To Control Infl!tion.

11:. )rior To The En!ctment Of The *onet!ry Control Act Of 1@=:/ $t!te-Ch!rtere"!n6s !" The Option Of Whether Or +ot They W!nte" To e A *em%er Of TheFe"er!l eser&e $ystem.

111. Interest !tes Incre!se Or #ecre!se $o Th!t An E8(ili%ri(m E2ists In The*oney *!r6et.

11'. The Fe"er!l Go&ernment/ Thro(gh The Wor6 Of Agencies Li6e The Fe"er!l +!tion!l *ortg!ge Associ!tion/ !s Wor6e" To Incre!se The $(pply Of F(n"sA&!il!%le To *ortg!ge Len"ers.

11,. A )olicy Implemente" y The Clinton A"ministr!tion es(lte" In Tighter

Fin!nci!l e8(irements For Less Cre"itworthy orrowers/ $o Th!t Fin!nci!l *!r6etsWere Less is6y.

114. A $(%prime *ortg!ge Is A *ortg!ge Iss(e" To A ighly (!lifie" orrower Ate"(ce" Interest !tes.

115. $(%prime *ortg!ges An" ome E8(ity Lo!ns Contri%(te" Little To TheIncre!se In The #em!n" For esi"enti!l e!l Est!te/ Incre!sing )rices #r!m!tic!lly.

8/20/2019 ECO 405 Week 9 Quiz


117. A omeowner Whose o(se Is Worth 95::/::: (t Who Owes 97::/::: OnTheir *ortg!ge Is A Goo" C!n"i"!te For A ome E8(ity Lo!n/ $o Th!t Theomeowner C!n (il" Their E8(ity.

11>. Coll!ter!li0e" #e%t O%lig!tions Are A W!y Th!t Len"ers C!n e"(ce The is6Of In"i&i"(!l *ortg!ge Len"ing.

11=. Coll!ter!li0e" #e%t O%lig!tions Alw!ys E2cl("e $(%prime *ortg!ges/ ec!(seThese Are Too is6y For *ost In&estors.

11@. A Cre"it #ef!(lt $w!p Is One W!y Th!t Len"ers C!n Offset $ome Of Theis6s Associ!te" With In&esting In $(%prime *ortg!ges.

1':. A +(m%er Of !n6s Enco(ntere" )ro%lems ec!(se A Ch!nge In Acco(nting(les e8(ire" Firms To *!r6 Assets At Their Origin!l )(rch!se )rice.

1'1. orrowers Who O%t!in A *ortg!ge Will Alw!ys Fin" Th!t Their *ortg!ge)!yments ise O&er Time.

1''. The #efinition Of The *oney $(pply C!lle" *1 Incl("es All Of The Assets

Incl("e" In The #efinition Of *'.

1',. An Incre!se In The e8(ire" eser&e !tio Will Allow !n6s To Cre!te Less*oney.

1'4. The Open *!r6et Committee Of The Fe"er!l eser&e $ystem *eets eg(l!rlyTo #etermine The e8(ire" eser&e !tio.

1'5. ec!(se Of ecent Ch!nges In The eg(l!tory $ystem/ Commerci!l !n6s AreA%le To Offer A $m!ller !riety Of Fin!nci!l )ro"(cts An" $er&ices Th!n In The)!st.

1'7. The #istinctions etween Commerci!l !n6s An" Other Fin!nci!l Instit(tions!s l(rre" In ecent 3e!rs.

1'>. L!rge Corpor!tions Enter The $econ"!ry Fin!nci!l *!r6et To )ro&i"eThemsel&es A"e8(!te Li8(i"ity To Con"(ct Their #!y To #!y Oper!tions.

8/20/2019 ECO 405 Week 9 Quiz


1'=. $toc6hol"ers C!n ecei&e A C!pit!l G!in When They )(rch!se A Fin!nci!lAsset.

1'@. $toc6s An" on"s Are Essenti!lly Interch!nge!%le Fin!nci!l Assets/ $ince

Owners Of oth Of These Instr(ments ecei&e eg(l!r Interest )!yments.

1,:. When en ern!n6e ec!me Fe" Ch!irm!n/ The Fe"er!l eser&e eg!nE2plicitly Anno(ncing *oney $(pply T!rgets.

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ECO 405 Week 9 Quiz