Question

50. One characteristic of the U.S. central bank is its: (a) control by the White House; (b) acceptance of appropriations from the Congress; (c) independence within the government; (d) dominance by large banks on its boards of directors.

51. Which of the following is not a primary role of the Federal Reserve? (a) to work with the president’s administration directly on the setting of fiscal policy; (b) to serve as a bank for banks; (c) to maintain the nation’s payments system; (d) to participate in supervision and regulation of banking institutions.

52. Suppose that the country of Jeteria has a marginal propensity to consume of 90% and a tax rate equal to 4/9. If autonomous spending in Jeteria increases by $100, national income could rise eventually, all other things remaining the same, by up to: (a) $100; (b) $200; (c) $1,800; (d) there is not enough information to answer this question.

53. A major demographic trend that will affect the long-term growth prospects of the developed market countries compared with the emerging market countries is: (a) the sharply higher birth rate of the DM countries’ echo-baby boom generation compared with baby boomers; (b) the persistent migration of DM populations to EM developing urban centers; (c) the expected mass migration of U.S. citizens to Canada over the next decade; (d) the aging of the DM countries’ populations relative to those of the EMs.

54. Coincident indicators, such as the Index of Industrial Production: (a) remind us that economic activities occur simultaneously, based on luck (coincidence) and exogenous factors mainly; (b) provide a current perspective on some aspect of economic activity; (c) foretell what is may happen in the economy; (d) no longer are calculated and reported by the Federal Reserve.

please do all if you can

Answer 1

50. (C) independence within the government

Reason: The Central bank is an independent organisation within the government

51.  (a) to work with the president’s administration directly on the setting of fiscal policy

Reason: Setting of fiscal policy is not the job of Federal Reserve

52. (B) $200

Reason: Multiplier = 1/(1-MPC)+MRT

Multiplier = 1/(1-0.9)+0.44 = 1/0.54 = 1.9

When spending increases by $100, GDP will increase by 100 x 1.9 = $190

53.(d) the aging of the DM countries’ populations relative to those of the EMs.

Reason: This is the biggest problem faced by developed countries

54. (b) provide a current perspective on some aspect of economic activity

Reason: They are helpful in understanding current state of the economy