ANSWER OUTLINE
ECONOMICS 353 (SECTION 2) L. Tesfatsion/Spring 99
EXERCISE SET 1: 5 POINTS TOTAL DUE: Tuesday, January 26, 2:10 P.M.
*IMPORTANT REMINDER: LATE ASSIGNMENTS CANNOT BE ACCEPTED -- NO EXCEPTIONS*
Please FILL IN YOUR NAME on Side 1 of the accompanying General Purpose
NCS Answer Sheet and use a #2 pencil to MARK YOUR ANSWERS on Side 1 of this
Answer Sheet to the following five multiple choice questions.
NOTE: Answer sheets can be obtained from Sue Streeter in 382 Heady
Hall if you missed the class handout.
1. The organization responsible for the conduct of monetary policy in the
United States is the
A. Comptroller of the Currency.
B. U.S. Treasury.
C C. Federal Reserve System.
D. Bureau of Monetary Affairs.
2. Evidence from business cycle fluctuations in the U.S. indicates that
A. a negative relationship exists between money growth and GDP
(i.e., one goes up when the other goes down and vice versa).
B. recessions have been preceded by declines in share prices on
the stock exchange.
C. recessions have been preceded by dollar depreciation.
D D. recessions have been preceded by a decline in the money growth rate.
3. The stock market is important because
A. it is where interest rates are determined.
B B. it is the most widely followed financial market in the U.S.
C. it is where foreign exchange rates are determined.
D. all of the above.
4. All else constant, as the dollar becomes stronger,
A. U.S. citizens will purchase fewer foreign goods.
B. U.S. goods exported abroad will cost less in foreign countries,
and so foreigners will buy more of them.
C. the U.S. is unquestionably better off.
D D. none of the above.
5. Which of the following are true statements?
A. Money is defined as anything that is generally accepted in payment
for goods and services or in the repayment of debts.
B. The inflation rate is measured as the rate of change in the
aggregate price level.
C. The inflation rate increases whenever the aggregate price level increases.
D. All of the above are true statements.
E E. Only A and B of the above are true statements.
