Question

Fed buys bonds in the open market influence the money supply it create money, they create wealth. ey supply of Hooba is $10,000 in a pl the money supply if they hold all depoits in reserve it the Banks cannot rnsl As banks create decreases the reserve requirement to 10 percest, the If Hooba could increase by no more than $9,000.e n u CHOICE QUESTIONS (1.5 marks banking system. percest, the money supply Per Question, 30 in total) (1) Which of the following is a of money? b. a store of value c medium of exchange d. All of the above are corredt 21 Babe Ruth, the famous baseball player, eamed $80,000 im 1931. Today, the best baseball players can earn more than 300 times as much as Babe Ruth earned in 195 However, prices have also risen since 1931. We can conclude that a the best baseball players today are about 300 times better off b. because prices have also risen, the standard of living of baseball c. one cannot make judgments about changes in the standard of d. one cannot determine whether baseball stars today enjoy a higher than Babe Ruth was in 1931. stars hasn't changed since 1931. living based on changes in prices and changes in incomes. standard of living than Babe Ruth did in 1931 without additional information regarding increases in prices since 1931 2 浙江工业大学考试命题纸

Answer 1

1. D

Explanation: Money has four functions - unit of account, store of value, medium of exchange and a standard of deferred payment.

2. Option D

Explanation: Standard of living depends on real income. Although nominal income i.e. dollar income has risen, we need information regarding price level changes in order to determine changes in real income.

3. B.

Explanation: CPI refers to the change in the price level of the basket of goods most generally consumed by consumers.

4. B

Explanation: Through GDP, we measure the total income as well as total spending on goods and services produced in an economy.

5. C

Explanation: GDP measures the total income as well as total spending on goods and services produced in an economy.

6. A

Explanation: CPI refers to consumer price index. CPI is used to compare the price level of a basket of goods commonly consumed by consumers. The goods and their quantity in the index are determined after consumer surveys.

7. B

Explanation: Productivity refers to output for each unit of input.