ECO 302 MILESTONE 3 MACROECONOMICS QUESTIONS WITH VERIFIED ANSWER,100%CORRECT

ECO 302 MILESTONE 3 MACROECONOMICS QUESTIONS WITH VERIFIED ANSWER Milestone 3 Macroeconomics Which statement below corresponds to the term "Federal Reserve?" • This acts as a central bank for its region of the country. • This is independent from the U.S. government. • This directly sets all interest rates in the economy. • The leader of this is an elected official. CONCEPT U.S. Central Bank: Federal Reserve 2 Which of the following is the reason why individuals are more certain of the value of their currency with central banks? • Central banks use paper money. • Central banks hold money in their reserves and make loans based on this money. • Central banks have tools that they use to control and stabilize the money supply. • Central banks lessen the reliance on the gold standard. CONCEPT Central Banks 3 Under which of the following circumstances would a fractional reserve system fail? As long as banks are able to earn money on interest • As long as there is more gold than paper money • As long as the holders of paper currency demand more gold than what banks are holding as reserves • As long as banks are able to make loans CONCEPT Fractional Gold Standard/Fiat Currency 4 Which of the following definitions corresponds to economic growth? • Percent change in value of the sum of a country's goods and services • The quantity of one type of money that corresponds to another • The difference between tax revenue and government expenditures • The cost of money