Mr Weiss Unit 5 5 Business cycles in

Mr. Weiss Unit 5 5. Business cycles in the United States a. b. c. d. occur about every 6 years. occur irregularly. always follow the same pattern. are always preceded by periods of mild inflation.

Mr. Weiss Unit 5 10. Which of the following events could cause this curve to shift to the right? a. b. c. d. an increase in taxes a decrease in interest rates an increase in the price foreign oil a decrease in the price level

Mr. Weiss Unit 5 15. The producer price index measures a. changes in the prices producers charge for the goods they sell. b. changes in the prices producers pay for the goods they buy. c. changes in the prices producers pay for salary wages. d. changes in the volume of producer sales.

Mr. Weiss Unit 5 20. It will take a few years for the global economy to achieve a new equilibrium between manufacturing production and consumer demand. Many goods are now in oversupply, and consumer demand is impaired by falling currencies and growth-inhibiting governmental policies. . But these are cyclical imbalances of the sort that have occurred for decades and will keep recurring from time to time. Source: Kiplinger’s Personal Finance Magazine, November 1998. This passage is describing a. b. c. d. a shift in aggregate demand. a shift in aggregate supply. a global economic boom. equilibrium between aggregate supply and demand.

Mr. Weiss Unit 5 25. One of the drawbacks of electronic funds transfer is a. it can take longer than manual transfers. b. the possibility of tampering is increased because records are stored in a computer. c. ATMs cannot always handle electronic funds transfers. d. not all banks are equipped to handle electronic funds transfer.

Mr. Weiss Unit 5 30. Representative money is money that is a. backed by a valuable item, such as gold. b. used in comparison for the values of goods and services. c. accepted in payment for private debts. d. coins and bills.

Mr. Weiss Unit 5 34. When you use the item shown in the illustration, you are using a. b. money. c. near money. d. fiat money. borrowed money.

Unit 5 Mr. Weiss The Federal Reserve, confronted with a global stock sell-off fanned by increased fears of a recession, cut a key interest rate by three-quarters of a percentage point on Tuesday. The Fed said it was cutting the federal funds rate, the interest that banks charge each other on overnight loans, to 3. 5 percent, down by three-fourths of a percentage point from 4. 25 percent. The Fed action was the most dramatic signal it can send that it is concerned about a potential recession in the U. S. It marked the biggest one-day move by the central bank in recent memory. Source: “The Fed Cuts Rates, ” businessweek. com, January 22, 2008. 40. According to the passage, the Fed pushed what rate to its lowest level since 1961? a. discount rate c. prime rate b. federal funds rate d. reserve rate

Mr. Weiss Unit 5 45. The main tool the Fed uses to affect interest rates is a. b. c. d. a loose money policy. a tight money policy. open market operations. check clearing.

Mr. Weiss Unit 5 50. Which of the following is affected by decisions of the Federal Open Market Committee? a. b. c. d. check clearing interest rates Congress’s ability to mint coins the amount of individual loans

Mr. Weiss Unit 5 55. According to the graph, government spending accounted for about what portion of the total value of the nation’s output between 1980 and 2000? a. b. c. d. about a quarter about a third about half about two thirds

Mr. Weiss Unit 5 60. According to the graph, about what percentage of total spending did the federal government spend in 2007 for the privilege of using borrowed money? a. b. c. d. a little more than 10% a little less than 10% a little more than 20% about 15%

Mr. Weiss Unit 5 65. Every year at this time, Congress discovers, with a great public show of dismay and indignation, the existence of the American tax code and the agency that administers it, the Internal Revenue Service. There are high-minded calls for abolishing the current tax system and replacing it. . Around April 15, Congress likes to pretend that the tax code just sort of appeared or [just] happened. But the Constitution puts the burden of taxes solely, exclusively and entirely on Congress’ shoulders. The tax code is the way it is because a majority of Congress wants it that way. Source: “How the Tax Code Got This Way, ” Denver Rocky Mountain News, April 16, 1999. Based on this passage, members of Congress probably like to pretend that the tax code just “sort of appeared” because they a. are not happy with the code. b. don’t want voters to associate them with taxes. c. feel the Internal Revenue Service does not administer taxes fairly. d. cannot fix the unfairness in the tax code.

Mr. Weiss Unit 5 70. Some people oppose government assistance because they believe it a. discourages personal responsibility. b. should be handled by large companies. c. increases tax revenues. d. shields citizens from the harmful effects of unemployment.

Mr. Weiss Unit 5 75. Deficit financing is a. b. c. d. a type of proportional tax. a public assistance program. balanced budgeting. government overspending.

Mr. Weiss Unit 5 Back in 1940, when the Social Security program was just getting under way, average life expectancy was less than 64 years. The program’s designers expected that most people would contribute to the program most of their lives and die before collecting a dime in retirement benefits. . Today, average life expectancy in the United States is more than 75 years. . As life expectancy has soared, birthrates have declined, leaving fewer and fewer workers to support the ballooning number of retirees. In 1950, [the system] was solidly supported with 16 workers paying for each retiree; today, there are just over three workers per beneficiary. Source: Carrie Lips, Cato Institute’s Project on Social Security Privatization. 80. According to the passage, the increase in average life expectancy has created a problem for the Social Security system because a. b. c. d. people are remaining in the workforce longer. more people are collecting retirement benefits for longer. younger workers are having a harder time finding jobs. people are retiring at a younger age.

Mr. Weiss Unit 5 85. Unemployment caused by up and down fluctuations in the business cycle is called a. b. c. d. cyclical unemployment. structural unemployment seasonal unemployment. frictional unemployment.

Mr. Weiss Unit 5 90. With economic growth slowing, the unemployment rate would rise to between 4. 8 percent and 4. 9 percent next year [which is] still low by historical standards. A previous forecast estimated the unemployment rate next year would be about 4. 75 percent. For all of last year, the jobless rate dipped to 4. 6 percent, a six-year low. The Fed said the "unemployment rate would increase modestly" in 2008, stabilize in 2009 and then decline slightly in 2010. Source: “Fed Forecasts Unemployment Bump in 2008, ”ABC News, Nov 20, 2007. According to the passage, what was the highest projected level of unemployment in 2008? a. b. 4. 6 percent 4. 75 percent c. d. 4. 8 percent 4. 9 percent

Mr. Weiss Unit 5 95. The main weaknesses of using fiscal policy to stabilize the economy are a. the underground economy and monetarism. b. high unemployment and stagflation. c. the political process and time lags. d. misguided economists and stubborn politicians.

Mr. Weiss Unit 5