ECO 320 Week 4 Quiz (A+ Guaranteed)

1. The money multiplier is equal to: (Points : 1)
C * R.
R + M1.
one divided by the reserve requirement.
one divided by R.

2. Which of the following is included in M2? (Points : 1)
Treasury bills
commercial paper
saving accounts
bonds

3. The monetary base is equal to: (Points : 1)
C + R.
C + money-market mutual funds.
1 divided by the reserve requirement.
M1 + M2.

4. The total quantity of currency plus demand deposits is called: (Points : 1)
M1.
M2.
the monetary base.
broad money.

5. Which of the following is not one of the components of M1 in the U.S.? (Points : 1)
coins
paper currency
currency
gold

6. If a basket of goods and services costing $100 in the U.S. costs 20,000 yen in
Japan, then the purchasing power parity exchange rate is _____ per dollar. (Points : 1)
50 yen
100 yen
150 yen
200 yen

7. The real exchange rate is: (Points : 1)
the nominal exchange rate minus inflation.
the nominal exchange rate adjusted for changes in the price level in the two countries.
the nominal exchange rate minus its base value.
the nominal exchange rate plus inflation.

8. The law of one price should hold well for: (Points : 1)
differentiated products.
real estate.
haircuts.
homogeneous products.

9. In general, trade flows between countries respond to: (Points : 1)
changes in the nominal exchange rate.
changes in the real exchange rate.
changes in interest rates.
changes in the real rate of interest.

10. Relative purchasing power parity means that: (Points : 1)
the exchange rate between any two currencies is equal to the ratio of their price indexes.
relative prices determine interest rates.
the same good sells for the same price internationally.
the percentage change in the exchange rate is equal to the inflation differential between the domestic and foreign currencies.

11. The income elasticity of the demand for exports: (Points : 1)
measures the percentage change in exports relative to a percentage change in domestic income.
measures the percentage change in domestic income relative to a percentage change in exports.
measures the percentage change in exports relative to a percentage change in foreign income.
measures the percentage change in foreign income relative to a percentage change in exports.

12. The wealth effect is defined as: (Points : 1)
an accumulation of money is the hands of a few individuals.
the effect of the wealth of a country.
the effect of changes in the price level on the value of people’s wealth.
the effect of changes in the exchange rate on the value of people’s wealth.

13. Everything else equal, an increase in consumption by the public would tend to
cause: (Points : 1)
a leftward shift in AD.
a fall in the price level.
a decrease in GDP.
a rightward shift of AD.

14. The relationship between the total quantity of goods and services all sectors of the economy demand and the price level is known as: (Points : 1)
aggregate supply.
GDP.
the consumer price index.
aggregate demand.

15. An exchange rate shock is defined as: (Points : 1)
a large and quick appreciation of a country’s currency.
a large and slow appreciation of a country’s currency.
a large and quick depreciation of a country’s currency.
a large and slow depreciation of a country’s currency.

16. The balance between inflows and outflows in the current account is known as: (Points : 1)
internal balance.
external balance.
macroeconomic balance.
the Phillips curve.

17. The levels of inflation and unemployment that fit the preferences of a country’s citizens is known as: (Points : 1)
microeconomic balance.
full employment balance.
the natural rate of unemployment.
internal balance.

18. Fiscal policy refers to government changing: (Points : 1)
its spending.
interest rates.
the money supply.
its quotas.

19. When the government employs a combination of higher taxes and lower
spending, this type of policy is called a: (Points : 1)
contractionary fiscal policy.
contractionary trade policy.
contractionary monetary policy.
contractionary exchange rate policy.

20. A contractionary fiscal policy: (Points : 1)
lowers the federal budget deficit and increases domestic interest rates.
increases the federal budget deficit and increases domestic interest rates.
lowers the federal budget deficit and decreases domestic interest rates.
increases the federal budget deficit and decreases domestic interest rates.

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Financial accounting reports financial and nonfinancial information that helps managers implement company strategies

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ACCOUNTING

True or False

Financial accounting reports financial and nonfinancial information that helps managers implement company strategies

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A budget may be used as a planning tool, but not as a control tool

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ACCOUNTING

True or False

A budget may be used as a planning tool, but not as a control tool

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It is difficult to control activities without a budget

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ACCOUNTING

True or False

It is difficult to control activities without a budget

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An important strategic decision is making the correct investments in productive assets

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ACCOUNTING

True or False

An important strategic decision is making the correct investments in productive assets

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Bannister Legal Services generated $2,000,000 in sales during 2010 (A+ Guaranteed)

12-4 (Sales Increase) Bannister Legal Services generated $2,000,000 in sales during 2010, and its year-end total assets were $1,500,000. Also, at year-end 2010, current liabilities were $500,000, consisting of $200,000 of notes payable, $200,000 of accounts payable, and $100,000 of accruals. Looking ahead to 2011, the company estimates that its assets must increase at the same rate as sales, its spontaneous liabilities will increase at the same rate as sales, its profit margin will be 5%, and its payout ratio will be 60%. How large a sales increase can the company achieve without having to raise funds externally; that is, what is its self-supporting growth rate?

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Developing a network of relationships with customers and suppliers is a valuable source of competitive advantage for a company (A+)

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ACCOUNTING

True or False

Developing a network of relationships with customers and suppliers is a valuable source of competitive advantage for a company

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The key to a company’s success is creating value for customers while differentiating itself from its competitors (A+)

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ACCOUNTING

True or False

The key to a company’s success is creating value for customers while differentiating itself from its competitors.

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The best-designed strategies are valuable whether or not they are effectively implemented (A+)

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ACCOUNTING

True or False

The best-designed strategies are valuable whether or not they are effectively implemented

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All strategies should be evaluated regarding the resources and capabilities of the company (A+)

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ACCOUNTING

True or False

All strategies should be evaluated regarding the resources and capabilities of the company.

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