General Economics

    
            In recent years, the federal tax that generated the largest
            percentage of federal tax revenues has been the

             corporate income tax.
             social security tax.
             personal income tax.
             sales tax



            Which of the following is a correct listing of money's functions?

             Source of credit, value of transaction costs, unit of barter
             Medium of barter, medium of exchange, medium of transactions
             Unit of barter, unit of account, a unit of income
             Store of value, medium of exchange, unit of account



            Which of the following statements is true?

             Of the three components of M1, the checkable deposits component is
            the largest.
             M1 is sometimes referred to as the broad definition of the money
            supply.
             Time deposits are a part of M1 but not M2.
             M1 is a larger dollar figure than M2.



            Required reserves are the amount of_________________.

             reserves a bank must hold against its deposits as mandated by the
            Federal Reserve
             cash a bank must hold against its deposits as mandated by the
            Federal Reserve
             checkable deposits a bank must hold against all other deposits as
            mandated by the U.S. Treasury
             reserves a bank must hold against all its assets as mandated by the
            Federal Reserve



            Bank A has deposits of $5,000 and reserves of $1,800. If the
            required-reserve ratio is 0.20, the bank has required reserves of
            ________________.

             $1,000
             $2,000
             $3,000
             $4,000


            The Federal Reserve System is the__________________.

             federal government agency that collects taxes and spends these
            receipts on tanks, bridges, employees' salaries, etc.
             company that delivers packages to your front door
             central bank of the United States
             federal government agency that collects and disseminates all the
            economic data that economists are interested in



            If the Fed wants to increase the money supply through an open market
            operation, it will

             purchase government securities .
             sell government securities.
             First purchase, then sell, government securities.
             Lend more reserves to commercial banks.


            The sale of a government security by the Fed

             decreases the supply of money.
             increases the supply of money.
             decreases the demand for money.
             increases the demand for money.


            The Fed can change the money supply by changing

             the required-reserve ratio.
             marginal income tax rates.
             federal excise taxes.
             unemployment benefits.




            The larger the simple deposit multiplier,

             the larger the required-reserve ratio.
             the smaller the required-reserve ratio.
             the smaller the change in the money supply for a given change in
            deposits.
             the less likely the Fed will be to use its monetary policy tools.