True and False: Circle one (2 points each) 1. Real interest rates and expected returns are drivers of the Consumer spending component of GDP.

True and False: Circle one (2 points each)

1.     Real interest rates and expected returns are drivers of the Consumer spending component of GDP.

                                                                       TRUE                                                 FALSE

2.     Structural unemployment is driven by the existing phase of the economic cycle.

                                                                      TRUE                                                 FALSE

3.     There is an unequal burden of unemployment stretching across the education continuum.

                                                                      TRUE                                                 FALSE

4.     Measuring Gross Domestic Product excludes the nonproduction processes such as financial transactions and second hand sales.

                                                                      TRUE                                                 FALSE

5.     As soon as goldsmiths became aware that some people did not return their tickets for the gold they stored safely with them, goldsmiths began issuing multiple tickets on each stored amount of gold – as loans.

                                                                       TRUE                                                FALSE

6.     Improvements in technology and increases in the supply of capital goods increase the potential size of the economy’s GDP.

                                                                       TRUE                                                 FALSE

7.     Though we are alleged to have a market economy, aggregate supply can be and usually is affected by Government regulation.

                                                                       TRUE                                                FALSE

8.     There are 15 Federal Reserve districts in the United States.

                                                                      TRUE                                                             FALSE

9.     The measurement of the money multiplier is the reciprocal of the excess reserve ratio.

                                                                       TRUE                                                             FALSE

10. Fiscal policy is not designed to achieve full employment and encourage economic growth but instead only to control inflation.

                                                                       TRUE                                                             FALSE

11.  An increase in business taxes and lowers the expected profitability of investments and shifts the investment demand curve to the right.

                                                                       TRUE                                                FALSE

12.  The effectiveness of stimulus is driven in part by average propensity to consume.

                                                                       TRUE                                                FALSE







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