國立高雄第一科技大學管理學院暨財金學院 學年度第 2 學期經濟學期末會考題目卷 ( A )

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1 國立高雄第一科技大學管理學院暨財金學院 學年度第 2 學期經濟學期末會考題目卷 ( A ) 1. Which of the following is a function of money? A. a unit of account B. a store of value C. medium of exchange D. All of the above are correct. 2. Prisoners sometimes determine a single good to be used as money. This good becomes A. a medium of exchange and a unit of account. B. a medium of exchange, but not a unit of account. C. a unit of account, but not a medium of exchange. D. neither a unit of account nor a medium of exchange. 3. Which of the following is not included in M1? A. currency B. demand deposits C. traveler s checks D. credit cards 4. John and Jane decide to go on a vacation. As a result, they withdraw $2,500 from their savings account to purchase $2,500 worth of traveler s checks. As a result of these changes, A. M1 increases by $2,500 and M2 decrease by $2,500. B. M1 increases by $2,500 and M2 stays the same. C. M1 and M2 stay the same. D. M1 decreases by $2,500 and M2 increases by $2, Which of the following does the Federal Reserve not do? A. conduct monetary policy B. act as a lender of last resort C. convert Federal Reserve Notes into gold D. serve as a bank regulator 6. In a fractional-reserve banking system, a bank A. does not make loans. B. does not accept deposits. C. keeps only a fraction of its deposits in reserve. D. None of the above is correct. 7. As the reserve ratio decreases, the money multiplier A. increases. B. does not change. C. decreases. D. could do any of the above. 8. Refer to Table 1. If $800 is deposited into the First Bank of Fairfield, and the bank takes no other actions, its A. reserves will increase by $100. B. liabilities will increase by $800. C. assets will decrease by $800. D. loans will increase by $800. Table 1 The First Bank of Fairfield Assets Liabilities Reserves $1,000 Deposits $8,000 Loans 7, The discount rate is the interest rate that A. banks charge one another for loans. B. banks charge the Fed for loans. C. the Fed charges banks for loans. D. the Fed charges Congress for loans. 1

2 10. The money supply increases when the Fed A. buys bonds. The increase will be larger, the smaller is the reserve ratio. B. buys bonds. The increase will be larger, the larger is the reserve ratio. C. sells bonds. The increase will be larger, the smaller is the reserve ratio. D. sells bonds. The increase will be larger, the larger is the reserve ratio. 11. If the public decides to hold less currency and more deposits in banks, bank reserves A. decrease and the money supply eventually decreases. B. decrease but the money supply does not change. C. increase and the money supply eventually increases. D. increase but the money supply does not change. 12. Which of the following is not a tool of monetary policy? A. increasing the government budget deficit B. reserve requirements C. changing the discount rate D. open market operations 13. The federal funds rate is the interest rate A. the Federal Reserve charges for loans it makes to the federal government. B. the Federal Reserve charges banks for short-term loans. C. banks charge each other for short-term loans of reserves. D. on newly issued one-year Treasury bonds. 14. The term hyperinflation refers to A. the spread of inflation from one country to others. B. a decrease in the inflation rate. C. a period of very high inflation. D. inflation accompanied by a recession. 15. When the Consumer Price Index increases from 100 to 120 A. more money is needed to buy the same amount of goods, so the value of money falls. B. more money is needed to buy the same amount of goods, so the value of money rises. C. less money is needed to buy the same amount of goods, so the value of money falls. D. less money is needed to buy the same amount of goods, so the value of money rises. 16. When the money market is drawn with the value of money on the vertical axis, if the price level is above the equilibrium level, there is an A. excess demand for money, so the price level will rise. B. excess demand for money, so the price level will fall. C. excess supply of money, so the price level will rise. D. excess supply of money, so the price level will fall. 17. Refer to Figure 1. Which of the following events could explain a shift of the money-supply curve from MS 1 to MS 2? A. an increase in the value of money Figure 1 On the graph, MS represents the money supply and MD represents money demand. The usual quantities are measured along the axes. B. a decrease in the price level C. an open-market purchase of bonds by the Federal Reserve D. the Federal Reserve sells bonds. Value of Money, 1/P Quantity of Money 2

3 18. In 1975 tuition at Wattsomata University was $2,500 and the consumer price index was 80. In 2011 tuition was $12,000 and the price index was 320. Which of the following is correct? A. Nominal and real tuition were both higher in B. Nominal and real tuition were both higher in C. Nominal tuition was higher in 1975, real tuition was higher in D. Nominal tuition was higher in 2011, real tuition was higher in The principle of monetary neutrality implies that an increase in the money supply will A. increase real GDP and the price level. B. increase real GDP, but not the price level. C. increase the price level, but not real GDP. D. increase neither the price level nor real GDP. 20. If Y and V are constant and M doubles, the quantity equation implies that the price level A. more than doubles. B. changes but less than doubles. C. doubles. D. does not change 21. If when the money supply changes, real output and velocity do not change, then a 2 percent increase in the money supply A. increases the price level by 2 percent. B. decreases the price level by less than 2 percent. C. increases the price level by less than 2 percent. D. decreases the price level by 2 percent. 22. Suppose the United States unexpectedly decided to pay off its debt by printing new money. Which of the following would happen? A. People who held money would feel poorer. B. Prices would rise. C. People who had lent money at a fixed interest rate would feel poorer. D. All of the above are correct. 23. Under the assumptions of the Fisher effect and monetary neutrality, if the money supply growth rate falls, then A. both the nominal and the real interest rate fall. B. neither the nominal nor the real interest rate fall. C. the nominal interest rate falls, but the real interest rate does not. D. the real interest rate falls, but the nominal interest rate does not. 24. Which of the following is correct? Inflation A. impedes financial markets in their role of allocating resources. B. reduces the purchasing power of the average consumer. C. generally increases after-tax real interest rates. D. is most costly when anticipated. 25. Wealth is redistributed from debtors to creditors when inflation is A. high, whether it is expected or not. B. low, whether it is expected or not. C. unexpectedly high. D. unexpectedly low. 26. A country's trade balance A. must be zero. B. must be greater than zero. C. is greater than zero only if exports are greater than imports. D. is greater than zero only if imports are greater than exports. 3

4 27. If Saudi Arabia had negative net exports last year, then it A. sold more abroad than it purchased abroad and had a trade surplus. B. sold more abroad than it purchased abroad and had a trade deficit. C. bought more abroad than it sold abroad and had a trade surplus. D. bought more abroad than it sold abroad and had a trade deficit. 28. Firms in Saudi Arabia sell oil to the U.S. Other things the same, these oil sales A. increase Saudi net exports and net capital outflow. B. decrease Saudi net exports and net capital outflow. C. increase Saudi net exports and decrease Saudi net capital outflow. D. decrease Saudi net exports and increase Saudi net capital outflow. 29. When Jamie, a U.S. citizen, purchases a wool jacket made in Ireland, the purchase is A. both a U.S. and Irish import. B. a U.S. import and an Irish export. C. a U.S. export and an Irish import. D. neither an export nor an import for either country. 30. Mike, a U.S. citizen, buys $1,000 worth of olives from Greece. By itself this purchase A. increases U.S. imports by $1,000 and increases U.S. net exports by $1,000. B. increases U.S. imports by $1,000 and decreases U.S. net exports by $1,000. C. increases U.S. exports by $1,000 and increases U.S. net exports by $1,000. D. increases U.S. exports by $1,000 and decreases U.S. net exports by $1, Suppose that a country imports $90 million worth of goods and services and exports $80 million worth of goods and services. What is the value of net exports? A. $170 million B. $80 million C. $10 million D. -$10 million 32. If U.S. exports are $300 billion and U.S. imports total $350 billion, which of the following is correct? A. The U.S. has a trade surplus of $350 billion. B. The U.S. has a trade surplus of $50 billion. C. The U.S. has a trade deficit of $350 billion. D. The U.S. has a trade deficit of $50 billion. 33. The increase in international trade in the United States is partly due to A. improvements in transportation. B. advances in telecommunications. C. increased trade of goods with a high value per pound. D. All of the above are correct. 34. Which of the following is an example of U.S. foreign direct investment? A. A U.S. based mutual fund buys stock in Eastern European companies. B. A U.S. citizen builds and operates a coffee shop in the Netherlands. C. A Swiss bank buys a U.S. government bond. D. A German tractor factory opens a plant in Waterloo, Iowa. 4

5 35. The purchase of U.S. government bonds by Egyptians is an example of A. U.S. imports. B. U.S. exports. C. foreign portfolio investment by Egyptians. D. foreign direct investment by Egyptians. 36. John, a U.S. citizen, opens up a Sports bar in Tokyo. This is an example of U.S. A. exports. B. imports. C. foreign portfolio investment. D. foreign direct investment. 37. Which of the following is correct? A. NCO = NX B. NCO + I = NX C. NX + NCO = Y D. Y = NCO - I 38. Other things the same, as the real interest rate falls A. domestic investment and net capital outflow both rise. B. domestic investment and net capital outflow both fall. C. domestic investment rises and net capital outflow falls. D. domestic investment falls and net capital outflow rises. 39. Other things the same, if the interest rate falls, then A. firms will want to borrow more, which increases the quantity of loanable funds demanded. B. firms will want to borrow less, which decreases the quantity of loanable funds demanded. C. firms will want to borrow more, which increase the quantity of loanable funds supplied. D. firms will want to borrow less, which decreases the quantity of loanable funds supplied. 40. At the equilibrium real interest rate in the open-economy macroeconomic model A. saving = domestic investment B. saving = net capital outflow C. net capital outflow = domestic investment D. net capital outflow + domestic investment = saving 41. Refer to Figure 2. The loanable funds market is in equilibrium at Figure 2 A. 2 percent, $20 billion. B. 4 percent, $40 billion. C. 6 percent, $60 billion. D. None of the above is correct. 42. Refer to Figure 2. If the real interest rate is 6 percent, the quantity of loanable funds demanded is A. $20 billion, and the quantity supplied is $40 billion. B. $20 billion, and the quantity supplied is $60 billion. C. $60 billion, and the quantity supplied is $20 billion. D. $60 billion, and the quantity supplied is $40 billion. 43. Refer to Figure 2. If the real interest rate is 2 percent, there will be a A. surplus of $20 billion. B. surplus of $40 billion. C. shortage of $20 billion. D. shortage of $40 billion. 5

6 44. At the equilibrium real interest rate in the open-economy macroeconomic model, the equilibrium quantity of loanable funds equals A. net capital outflow. B. domestic investment. C. foreign currency supplied. D. national saving. 45. If a government has a budget surplus, then public saving A. is positive and increases national saving. B. is positive but decreases national saving. C. is negative and decreases national saving. D. is negative but increases national saving. 46. If the budget deficit increases, then A. an increase in the interest rate increases net capital outflow. B. an increase in the interest rate decreases net capital outflow. C. a decrease in the interest rate increases net capital outflow. D. a decrease in the interest rate decreases net capital outflow. 47. Other things the same, as the real interest rate rises A. domestic investment and net capital outflow both rise. B. domestic investment and net capital outflow both fall. C. domestic investment rises and net capital outflow falls. D. domestic investment falls and net capital outflow rises. 48. If the demand for dollars in the market for foreign-currency exchange shifts right, then the exchange rate A. rises and the quantity of dollars exchanged rises. B. rises and the quantity of dollars exchanged does not change. C. falls and the quantity of dollars exchanged falls. D. falls and the quantity of dollars exchanged does not change. 49. When the U.S. real interest rate falls, purchasing U.S. assets becomes A. more attractive to both U.S. and foreign residents. B. more attractive to U.S. residents and less attractive to foreign residents. C. less attractive to U.S. residents and more attractive to foreign residents. D. less attractive to both U.S. residents and foreign residents. 50. A tax on imported goods is called a(n) A. excise tax. B. tariff. C. import quota. D. None of the above is correct. 6