Q1. To decrease the nation’s money supply, the Fed can
increase reserve requirement.
decrease reserve requirements.
decrease the discount rate.
buy government securities in the open market.
Q2. In the long-run framework, budget surpluses
should be run whenever output dips below potential output.
should never be run since they crowd out investment in the short run.
are better than budget deficits over the long run because unlike budget deficits, they increase saving and investment.
should be run on a permanent basis since they boost saving and investment and stimulate economic growth.
Q3. Which of the following will decrease the nominal deficit?
An increase in taxes
An increase in government expenditures
An increase in interest rates
An increase in the debt
Q4. If a country’s trade deficit increases, then
its consumption must be falling relative to its production.
its consumption must be rising relative to its production.
it must be buying more assets from foreigners.
it must be selling fewer assets to foreigners.
Q5. Which of the following statements best describes the modern view of marketing?
Marketing is only necessary for profit-oriented firms.
Marketing consists mainly of advertising and personal selling.
Marketing anticipates customer needs.
Marketing begins as soon as products are produced.
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