Question 1

Alternative forms of money include:

Accepted Answer

A)  frequent flier miles. 
B)  gift cards. 
C)  pre-paid debit cards. 
D)  PayPal. 
E)  All of these answers are correct. 
A)  frequent flier miles. 
B)  gift cards. 
C)  pre-paid debit cards. 
D)  PayPal. 
E)  All of these answers are correct.

Question 2

To minimize what was believed to be a wage-price spiral, the ________ administration ________.

Accepted Answer

A)  Reagan; increased corporate income 
B)  Carter; increased interest rates 
C)  Clinton; released oil from the strategic reserves 
D)  first Bush; increased taxes 
E)  Nixon; imposed price controls 
A)  Reagan; increased corporate income 
B)  Carter; increased interest rates 
C)  Clinton; released oil from the strategic reserves 
D)  first Bush; increased taxes 
E)  Nixon; imposed price controls

Question 3

The costs associated with changing prices are called menu costs.

Accepted Answer

A) True 
 B)False

Question 4

The right to seignorage is the right to:

Accepted Answer

A)  make coins. 
B)  raise tax revenues. 
C)  print money. 
D)  borrow from the public. 
E)  raise an army. 
A)  make coins. 
B)  raise tax revenues. 
C)  print money. 
D)  borrow from the public. 
E)  raise an army.

Question 5

Which of the following has NO effect on long-run economic growth?

Accepted Answer

A)  institutions 
B)  money 
C)  productivity 
D)  investment 
E)  population 
A)  institutions 
B)  money 
C)  productivity 
D)  investment 
E)  population

Question 6

What is a critical factor that contributed to Reagan's defeat of Carter in the 1980 presidential election?

Accepted Answer

A)  double-digit inflation 
B)  the low rate of unemployment 
C)  the takeover of the U.S. embassy in Baghdad, Iraq 
D)  Billy Carter's beer 
E)  Margaret Thatcher 
A)  double-digit inflation 
B)  the low rate of unemployment 
C)  the takeover of the U.S. embassy in Baghdad, Iraq 
D)  Billy Carter's beer 
E)  Margaret Thatcher

Question 7

The quote "Inflation is always and everywhere a monetary phenomenon" is attributed to:

Accepted Answer

A)  Karl Marx. 
B)  Thomas Sargent. 
C)  Milton Friedman. 
D)  Alan Greenspan. 
E)  David Ricardo. 
A)  Karl Marx. 
B)  Thomas Sargent. 
C)  Milton Friedman. 
D)  Alan Greenspan. 
E)  David Ricardo.

Question 8

In 1979, President Carter appointed ________ as chairman of the Board of Governors of the Federal Reserve to battle ________.

Accepted Answer

A)  Greenspan; inflation 
B)  Volcker; the Soviet Union 
C)  Volcker; inflation 
D)  Bernanke; unemployment 
E)  Powell; Ayatollah Khomeini 
A)  Greenspan; inflation 
B)  Volcker; the Soviet Union 
C)  Volcker; inflation 
D)  Bernanke; unemployment 
E)  Powell; Ayatollah Khomeini

Question 9

M1 consists of savings and money market accounts.

Accepted Answer

A) True 
 B)False

Question 10

M2 includes M1 and:

Accepted Answer

A)  large time deposits. 
B)  overnight repurchase agreements. 
C)  savings accounts. 
D)  long-term bonds. 
E)  gold reserves. 
A)  large time deposits. 
B)  overnight repurchase agreements. 
C)  savings accounts. 
D)  long-term bonds. 
E)  gold reserves.

Question 11

Table 8.2: Monetary Aggregates (in billions)   
(Source: Federal Reserve Board of Governors)
Table 8.2 above contains monetary aggregates for the United States for February and December 2015. Fill in the last three columns for each month. MMF stands for "money market funds."

Accepted Answer

@#LAT-DLM&M1 = Currency +Travelers Check

Question 12

In the United States, decisions about monetary policy are conducted by the Federal Reserve, which is likely to lower income taxes.

Accepted Answer

A) True 
 B)False

Question 13

Suppose you put $100 in the bank on January 1, 2017. If the annual nominal interest rate is 5 percent and the inflation rate is 2 percent, you will be able to buy ________ worth of goods on January 1, 2018, valued at 2017's prices.

Accepted Answer

A)  $93 
B)  $107 
C)  $103 
D)  $105 
E)  $99 
A)  $93 
B)  $107 
C)  $103 
D)  $105 
E)  $99

Question 14

Short-term treasury bills are the most liquid form of asset.

Accepted Answer

A) True 
 B)False

Question 15

Table 8.1   
(Source: U.S. Bureau of Labor Statistics)
Considering the end-of-year CPI data in Table 8.1:
(a) Calculate the rate of inflation between 1970 and 1975 and between 1995 and 2000.
(b) Calculate the average rate of inflation for 1970-1975 and 1970-1980.
(c) Calculate the average rate of inflation for 2000-2010 and 2014-2015.
(d) Briefly comment on your results.

Accepted Answer

(a) Use the equation @#IMG-DLM& .
For 1970-1975:
1

Question 16

The price controls imposed by the Nixon administration lasted for:

Accepted Answer

A)  four weeks. 
B)  six months. 
C)  90 days. 
D)  one year. 
E)  two years. 
A)  four weeks. 
B)  six months. 
C)  90 days. 
D)  one year. 
E)  two years.

Question 17

Money neutrality is the proposition that changes in money have no real effect on the economy.

Accepted Answer

A) True 
 B)False

Question 18

Money made with silver, gold, and chocolate are examples of ________ money.

Accepted Answer

A)  fiat 
B)  commodity 
C)  backed 
D)  government 
E)  None of these answers is correct. 
A)  fiat 
B)  commodity 
C)  backed 
D)  government 
E)  None of these answers is correct.

Question 19

Sometimes when discussing inflation, we use a measure of inflation that excludes ________ prices from its calculation because these prices tend to be volatile.

Accepted Answer

A)  commodity and energy 
B)  food and energy 
C)  housing 
D)  food and housing 
E)  energy and housing 
A)  commodity and energy 
B)  food and energy 
C)  housing 
D)  food and housing 
E)  energy and housing

Question 20

Inflation ________ price volatility and ________ allocative efficiency.

Accepted Answer

A)  decreases; increases 
B)  decreases; leaves unchanged 
C)  increases; leaves unchanged 
D)  increases; decreases 
E)  leaves unchanged; increases 
A)  decreases; increases 
B)  decreases; leaves unchanged 
C)  increases; leaves unchanged 
D)  increases; decreases 
E)  leaves unchanged; increases

Alternative forms of money include:

To minimize what was believed to be a wage-price spiral, the administration .

The costs associated with changing prices are called menu costs.

The right to seignorage is the right to:

Which of the following has NO effect on long-run economic growth?

What is a critical factor that contributed to Reagan's defeat of Carter in the 1980 presidential election?

The quote "Inflation is always and everywhere a monetary phenomenon" is attributed to:

In 1979, President Carter appointed as chairman of the Board of Governors of the Federal Reserve to battle .

M1 consists of savings and money market accounts.

M2 includes M1 and:

Table 8.2: Monetary Aggregates (in billions) (Source: Federal Reserve Board of Governors) Table 8.2 above contains monetary aggregates for the United States for February and December 2015. Fill in the last three columns for each month. MMF stands for "money market funds."

In the United States, decisions about monetary policy are conducted by the Federal Reserve, which is likely to lower income taxes.

Suppose you put $100 in the bank on January 1, 2017. If the annual nominal interest rate is 5 percent and the inflation rate is 2 percent, you will be able to buy ________ worth of goods on January 1, 2018, valued at 2017's prices.

Short-term treasury bills are the most liquid form of asset.

The price controls imposed by the Nixon administration lasted for:

Money neutrality is the proposition that changes in money have no real effect on the economy.

Money made with silver, gold, and chocolate are examples of ________ money.

Sometimes when discussing inflation, we use a measure of inflation that excludes ________ prices from its calculation because these prices tend to be volatile.

Inflation price volatility and allocative efficiency.

Introduction to Macroeconomics

Measuring the Macroeconomy

An Overview of Long-Run Economic Growth

A Model of Production

The Solow Growth Model

Growth and Ideas

The Labor Market, Wages, and Unemployment

An Introduction to the Short Run

The Great Recession: a First Look

The Is Curve

Monetary Policy and the Phillips Curve

Stabilization Policy and the Asad Framework

The Great Recession and the Short-Run Model

Dsge Models: the Frontier of Business Cycle Research

Consumption

Investment

The Government and the Macroeconomy

International Trade

Exchange Rates and International Finance

Parting Thoughts

Filters

Exam 8: Inflation

Alternative forms of money include:

To minimize what was believed to be a wage-price spiral, the ________ administration ________.

The costs associated with changing prices are called menu costs.

The right to seignorage is the right to:

Which of the following has NO effect on long-run economic growth?

What is a critical factor that contributed to Reagan's defeat of Carter in the 1980 presidential election?

The quote "Inflation is always and everywhere a monetary phenomenon" is attributed to:

In 1979, President Carter appointed ________ as chairman of the Board of Governors of the Federal Reserve to battle ________.

M1 consists of savings and money market accounts.

M2 includes M1 and:

Table 8.2: Monetary Aggregates (in billions) (Source: Federal Reserve Board of Governors) Table 8.2 above contains monetary aggregates for the United States for February and December 2015. Fill in the last three columns for each month. MMF stands for "money market funds."

In the United States, decisions about monetary policy are conducted by the Federal Reserve, which is likely to lower income taxes.

Suppose you put $100 in the bank on January 1, 2017. If the annual nominal interest rate is 5 percent and the inflation rate is 2 percent, you will be able to buy ________ worth of goods on January 1, 2018, valued at 2017's prices.

Short-term treasury bills are the most liquid form of asset.

The price controls imposed by the Nixon administration lasted for:

Money neutrality is the proposition that changes in money have no real effect on the economy.

Money made with silver, gold, and chocolate are examples of ________ money.

Sometimes when discussing inflation, we use a measure of inflation that excludes ________ prices from its calculation because these prices tend to be volatile.

Inflation ________ price volatility and ________ allocative efficiency.

Introduction to Macroeconomics

Measuring the Macroeconomy

An Overview of Long-Run Economic Growth

A Model of Production

The Solow Growth Model

Growth and Ideas

The Labor Market, Wages, and Unemployment

An Introduction to the Short Run

The Great Recession: a First Look

The Is Curve

Monetary Policy and the Phillips Curve

Stabilization Policy and the Asad Framework

The Great Recession and the Short-Run Model

Dsge Models: the Frontier of Business Cycle Research

Consumption

Investment

The Government and the Macroeconomy

International Trade

Exchange Rates and International Finance

Parting Thoughts

Filters

To minimize what was believed to be a wage-price spiral, the administration .

In 1979, President Carter appointed as chairman of the Board of Governors of the Federal Reserve to battle .

Inflation price volatility and allocative efficiency.