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ECN 360 Final Exam – Question and Answers Grand Canyon

1. Which of the following represents the relationship between Disposable income (DI), consumption (C), and saving (S)?
2. Which of the following is NOT a method for promoting global Economic growth?
3. In the classical model, an increase in aggregate demand will cause
4. Of the relationships below, which is the least stable?
5. When investment occurs in developing nations
6. A multinational agency that specializes solely in making loans to promote long-term development and growth in developing countries is the
7. The Board of Governors of the Federal Reserve System is
8. Supply-side inflation is caused by
9. Keynesian theory is based on the concept that
10. When the Fed conducts open market operations, it
11. An increase in the money supply will
12. According to the quantity theory of money, an excess quantity of money supplied will lead to
13. Adverse selection is a barrier to financing global growth because
14. An increase in the money supply will cause which of the following to occur?
15. In the above figure, when disposable income is greater than 600,
16. Which of the following is true about the World Bank?
17. A higher domestic price level should
18. Moral hazard is a barrier to financing global growth because
19. In the Keynesian model, whenever planned investment is greater than planned saving,
20. Country X has experienced GDP growth of 6 percent and a population growth of 4 percent. What is this country’s growth of per capita real GDP?
21. Fractional reserve banking can be thought of as a bank
22. Suppose that a new customer opens a checking account and a saving account, placing $50,000 in each. Later, the bank makes a loan of $100,000 to a business firm. For this bank,
23. Consider the above figure. At a price level of 150,
24. Europe and Asia both fall into deep economic recessions. What impact will this have on U.S. aggregate demand?
25. How does the Fed increase the level of reserves in the banking system?
26. Involuntary unemployment
27. At a level of real disposable income of $0, suppose consumption is $2,000. Given this information, we know with certainty that saving equals
28. Suppose that when disposable income decreases by $2,000, consumption spending increases by $1500. Given this information, we know that the marginal propensity to consume (MPC) is
29. In the Keynesian model, an aggregate demand shock
30. The planned investment function will shift downward if
31. Which of the following is NOT a function of the Fed?
32. Refer to the above figure. If the MPC is unchanged and level of autonomous consumption increases, what occurs?
33. When a nation’s currency suddenly loses value, the ________ may step in to buy the afflicted currency.
34. A checking account is
35. A decrease in aggregate demand will cause
36. The classical model uses the assumption that
37. Investment includes spending on
38. The multinational organization that aims to promote world economic growth by fostering financial stability is the
39. When the U.S. dollar appreciates,
40. The international unit of accounting used by the International Monetary Fund (IMF) is called