Econ 1113 exam 3 Norwood Questions With
Complete Solutions
what are the 3 functions of money
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give examples for each - CORRECT ANSWER✔✔-medium of exchange:
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used to buy and sell goods
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unit of account: price tag, tells you how expensive things are
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store of value: hold some wealth in money form ($20 today will still be
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$20 a year from now)
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what is M1 money? - CORRECT ANSWER✔✔-any money you can use to
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buy something at a store (cash, coins, debit card, checks)
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what are checkable deposits? - CORRECT ANSWER✔✔-any demand
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deposit account against which checks or drafts of any kind may be
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written
what is discretionary fiscal policy? - CORRECT ANSWER✔✔-changes in
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government spending & taxes that are at the option of the federal
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government
, what is fiscal policy and who is in charge of it? - CORRECT ANSWER✔✔--
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consists of changes in government spending and tax collections
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-wants to achieve full employment, price stability, and economic growth
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expansionary fiscal policy - CORRECT ANSWER✔✔-increases
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government purchases of goods/services, decreases net taxes, increases
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agg demand & expand real output
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contractionary fiscal policy - CORRECT ANSWER✔✔-decreases
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government purchases of goods/services, increases net taxes, decreases
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agg demand, & and controls inflation
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how many districts are in the Federal Reserve System? - CORRECT
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ANSWER✔✔-12
The FED is set up as an independent agency to protect it from
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__________ pressure. - CORRECT ANSWER✔✔-POLITICAL
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What are reverse repos? Does the FED change the money supply or
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borrow money to influence the supply of money temporarily? -
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CORRECT ANSWER✔✔-IOU from a bank to the FED. They give money in
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exchange for collateral and then repay the money and get the collateral
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back.
Complete Solutions
what are the 3 functions of money
| | | | | |
give examples for each - CORRECT ANSWER✔✔-medium of exchange:
| | | | | | | | |
used to buy and sell goods
| | | | |
unit of account: price tag, tells you how expensive things are
| | | | | | | | | |
store of value: hold some wealth in money form ($20 today will still be
| | | | | | | | | | | | | |
$20 a year from now)
| | | |
what is M1 money? - CORRECT ANSWER✔✔-any money you can use to
| | | | | | | | | | | |
buy something at a store (cash, coins, debit card, checks)
| | | | | | | | |
what are checkable deposits? - CORRECT ANSWER✔✔-any demand
| | | | | | | |
deposit account against which checks or drafts of any kind may be
| | | | | | | | | | | |
written
what is discretionary fiscal policy? - CORRECT ANSWER✔✔-changes in
| | | | | | | | |
government spending & taxes that are at the option of the federal
| | | | | | | | | | | |
government
, what is fiscal policy and who is in charge of it? - CORRECT ANSWER✔✔--
| | | | | | | | | | | | |
consists of changes in government spending and tax collections
| | | | | | | | |
-wants to achieve full employment, price stability, and economic growth
| | | | | | | | |
expansionary fiscal policy - CORRECT ANSWER✔✔-increases
| | | | | |
government purchases of goods/services, decreases net taxes, increases
| | | | | | |
agg demand & expand real output
| | | | | |
contractionary fiscal policy - CORRECT ANSWER✔✔-decreases
| | | | | |
government purchases of goods/services, increases net taxes, decreases
| | | | | | |
agg demand, & and controls inflation
| | | | | |
how many districts are in the Federal Reserve System? - CORRECT
| | | | | | | | | | |
ANSWER✔✔-12
The FED is set up as an independent agency to protect it from
| | | | | | | | | | | | |
__________ pressure. - CORRECT ANSWER✔✔-POLITICAL
| | | |
What are reverse repos? Does the FED change the money supply or
| | | | | | | | | | | |
borrow money to influence the supply of money temporarily? -
| | | | | | | | | |
CORRECT ANSWER✔✔-IOU from a bank to the FED. They give money in
| | | | | | | | | | | |
exchange for collateral and then repay the money and get the collateral
| | | | | | | | | | | |
back.
