What is the most timely barometer of the health of the labor market for economists?

Weekly claims made to the unemployment insurance system.

What is the Federal Funds Rate?

The interest rate banks charge each other on overnight transactions.

What is the primary benefit of a weak dollar?

American businesses are more competitive overseas.

What is the difference between normal and core inflation?

Core inflation removes food and oil prices.

How does the Federal government produce the monthly "jobs report"?

Surveys of American businesses and households.

Why might some economists not worry about the Federal government's debt in the United States?

Interest rates are low and economic growth is high.

Why should a country worry about deflation?

Unemployment is the likely result.

Paul Volcker is a former chair of the Federal Reserve. Why is he especially noteworthy in economic history?

He ended the Great Inflation by pushing interest rates sky high.

What is the primary role of the FDIC?

Insures depositors' bank accounts.

Which of the following would be classified as a "marginally attached worker"?

A retiree who isn't looking for work but would accept a job if offered.

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ECON 20200 Exam #2

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Questions 19

Answers

1
What is the most timely barometer of the health of the labor market for economists?
Weekly claims made to the unemployment insurance system.
Daily reports by the BLSon the number of new job openings.
Their own job statuses. If they've been fired, the market sucks.
The monthly jobs report.
2
What is the Federal Funds Rate?
The interest rate people have to pay on a 30-year fixed rate mortgage.
The interest rate banks charge each other on overnight transactions.
The interest rate that the median person has to pay on credit cards.
The interest rate the government has to pay on 10-year Treasury bills.
3
If the Fed wanted to engage in contractionary monetary policy would they buy or sell bonds?
Sell
Buy
4
The Federal Reserve has three vital responsibilities. Which is NOT one of them?
Collect income tax payments.
Manage the supply of money.
The Dual Mandate: Stable Prices and Maximum Employment
Supervise and regulate banks.
5
What is the primary benefit of a weak dollar?
Prices are cheaper for American consumers.
American businesses are more competitive overseas.
Foreign investment in the US will increase.
WTF? There are benefits to a weak dollar? Oh man, I'm screwed on this exam.
6
What is the difference between normal and core inflation?
Core inflation measures the prices producers pay for raw materials.
Core inflation removes food and oil prices.
Core inflation only gauges the basics (food, housing, oil, utilities).
WTF? I'm six questions into this and am now scared about the exam.
7
A $100M government bridge construction project will have an overall economic impact that is _____________ $100M.
equal to
greater than
There will be no economic impact; the bridge will never get finished.
less than
8
How does the Federal government produce the monthly "jobs report"?
Assessing jobless claims made to the unemployment insurance system.
The government just makes crap up. No one knows.
Surveys of the top labor economists in the country.
Surveys of American businesses and households.
9
Why might some economists not worry about the Federal government's debt in the United States?
The government can simply default and just not pay back all that interest.
Big countries don't have financial problems related to government spending.
Interest rates are low and economic growth is high.
Economists smoke a lot of weed, so they're pretty chill about everything.
10
A state lottery is considered which type of "tax"?
Proportional
It's not a tax. It's a scam.
Regressive
Progressive
11
Why should a country worry about deflation?
Prices will rise.
Bad jokes about car tires and flatulence.
Interest rates will increase.
Unemployment is the likely result.
12
Paul Volcker is a former chair of the Federal Reserve. Why is he especially noteworthy in economic history?
He was arrested for smuggling cigars in from Cuba; Pres. Reagan fired him.
He authored stimulus checks at the start of the COVID-19 pandemic.
He settled down financial markets at the time of the Great Recession.
He ended the Great Inflation by pushing interest rates sky high.
13
What did the Federal Reserve do when banks started failing at the start of the Great Depression?
Nothing.
Gave substantial loans to banks across the country.
Purchased a ton of government bonds.
Ran the money printing press 24 hours a day, 7 days a week.
14
Expansionary monetary policy is expected to _______________ employment and cause prices to _________________.
Decrease, increase
Decrease, decrease
Increase; increase
Increase; decrease
15
Suppose that there is a shock that causes oil prices to spike. How will this be reflected in the AD/AS model?
AS shifts left
AD shifts left
AD shifts right
AS shifts right
16
If a central bank engages in expansionary policy, what is the potential risk?
Unemployment
Inflation
Jerome Powell gets drunk and passes out in the Fed's vault.
Deflation
17
Which type of unemployment goes up and down as the broader economy rises and falls?
Cyclical unemployment
Frictional unemployment
Seasonal unemployment
Structural unemployment
18
What is the primary role of the FDIC?
Raises and lowers interest rates that banks pay on loans.
Get coffee and donuts for the Federal Reserve at their meetings.
Insures depositors' bank accounts.
Conducts open-market operations.
19
Which of the following would be classified as a "marginally attached worker"?
A college student who wishes her job offered her many more hours.
A laid-off factory worker who has given up looking for a job.
An economics professor on the verge of being fired for swearing too much.
A retiree who isn't looking for work but would accept a job if offered.

ECON 20200 Exam #2 Flashcards | StudBud