BUS 599 Week 6 Quiz

This archive file of BUS 599 Week 6 Quiz comprises:

1. The GNP for Never Never Land increased from $1 million to $4 million in one year. Stan says that this is because the number of units produced increased; Sally said it was because of price increases. Who is right?

2. A group of economics students gathered to study for a test on the money and banking system in the U.S. During a fast and furious brainstorm session, Jill scribbled down several key phrases she will use to study tomorrow. Unfortunately, in her haste, all the statements in her notes are incorrect:

- Two forms of money include cash and credit cards because both are accepted as payment. - All savings accounts are considered transaction accounts because they represent money.

- Consumers who make loan payments create transaction accounts.

- If I open a savings account at a bank with cash received as a birthday gift, I'll increase the money supply in the economy.

- By creating transaction accounts, even a single bank has unlimited power to affect the money supply.

- If a bank has $10 million in reserves and an additional $3 million in excess reserves, it can make loans up to $13 million. What advise would you offer Jill about statement C above?

3. A group of economics students gathered to study for a test on the money and banking system in the U.S. During a fast and furious brainstorm session, Jill scribbled down several key phrases she will use to study tomorrow. Unfortunately, in her haste, all the statements in her notes are incorrect:

- Two forms of money include cash and credit cards because both are accepted as payment.

- All savings accounts are considered transaction accounts because they represent money.

- Consumers who make loan payments create transaction accounts. - If I open a savings account at a bank with cash received as a birthday gift, I'll increase the money supply in the economy.

- By creating transaction accounts, even a single bank has unlimited power to affect the money supply.

- If a bank has $10 million in reserves and an additional $3 million in excess reserves, it can make loans up to $13 million. What advise would you offer Jill about statement F above?

4. A group of economics students gathered to study for a test on the money and banking system in the U.S. During a fast and furious brainstorm session, Jill scribbled down several key phrases she will use to study tomorrow. Unfortunately, in her haste, all the statements in her notes are incorrect:

- Two forms of money include cash and credit cards because both are accepted as payment.

- All savings accounts are considered transaction accounts because they represent money.

- Consumers who make loan payments create transaction accounts.

- If I open a savings account at a bank with cash received as a birthday gift, I'll increase the money supply in the economy.

- By creating transaction accounts, even a single bank has unlimited power to affect the money supply.

- If a bank has $10 million in reserves and an additional $3 million in excess reserves, it can make loans up to $13 million. What advise would you offer Jill about statement E above?

5. A group of economics students gathered to study for a test on the money and banking system in the U.S. During a fast and furious brainstorm session, Jill scribbled down several key phrases she will use to study tomorrow. Unfortunately, in her haste, all the statements in her notes are incorrect:

- Two forms of money include cash and credit cards because both are accepted as payment.

- All savings accounts are considered transaction accounts because they represent money.

- Consumers who make loan payments create transaction accounts.

- If I open a savings account at a bank with cash received as a birthday gift, I'll increase the money supply in the economy.

- By creating transaction accounts, even a single bank has unlimited power to affect the money supply.

- If a bank has $10 million in reserves and an additional $3 million in excess reserves, it can make loans up to $13 million. What advise would you offer Jill about statement B above?

6. Which of the following analogies correctly reflects the relationship between progressive taxes and regressive taxes?

7. Which of the following could you cite as in-kind income?

8. One of your classmates says that the trade imbalance in the U. S. will continue for a long time because of improvements in communication and transportation. What has your classmate overlooked in this assessment?

9. In what way does the phrase, "gross domestic product," seem to be a misnomer?

10. What rationale could you use to explain the following statement: " income mobility makes lifelong incomes much less unequal than annual incomes."