“Crowding in” refers to federal government deficits a. used for public infrastructure, which will offset any decline in business investment.b. which reduce private business and consumption spending.c. which reduce future rates of economic growth.d. All of the answers above are correct.

When measured as a percentage of GDP, the U.S. national debt reached its highest levels as a result of a. World War II.b. the Vietnam War.c. the Reagan defense build-up and tax cuts.d. the Obama economic recovery program.

Supply-side economists argue that less government spending a. will contract the productive side of the economy.b. will result in more crowding out.c. causes higher rates of unemployment and inflation.d. would cause interest rates to increase dramatically.e. would make more investment capital available at lower rates of interest to the private sector.

Discuss this statement: “A man with a million dollars who is lost in the desert learns the meaning of money.” Could each of the following items potentially serve as money? Consider each as (1) a medium of exchange, (2) a unit of account, and (3) a store of value. a. Visa credit card.b. Federal Reserve

What backs the U.S. dollar? Include the distinction between commodity money and fiat money in your answer. What are the components of the most narrowly defined money supply in the United States? Distinguish between M1 and M2. What are near monies?

What is the major purpose of the Federal Reserve System? What is the major responsibility of the Board of Governors and the Federal Open Market Committee? Should the Fed be independent or a government agency subordinate to Congress and the president?

The easier it is to convert an asset directly into goods and services without loss, the a. less secure it is.b. more secure it is.c. more liquid it is.d. less liquid it is.

M1 refers to a. the most narrowly defined money supply.b. currency held by the public plus checking account balances.c. the smallest dollar amount of the money supply definitions.d. All of the answers above are correct.

The M1 definition of the money supply consists of a. coins and currency in circulation.b. coins and currency in circulation, and check-able deposits.c. Federal Reserve notes, gold certificates, and checkable deposits.d. Federal Reserve notes and bank loans.

Which of the following items is not included when computing M1? a. Coins in circulation.b. Currency in circulation.c. Savings accounts.d. Checking account entries.