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    Federal Tax Revenues

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    In recent years, the federal tax that generated the largest
    percentage of federal tax revenues has been the

    corporate income tax.
    social security tax.
    personal income tax.
    sales tax

    Which of the following is a correct listing of money's functions?

    Source of credit, value of transaction costs, unit of barter
    Medium of barter, medium of exchange, medium of transactions
    Unit of barter, unit of account, a unit of income
    Store of value, medium of exchange, unit of account

    Which of the following statements is true?

    Of the three components of M1, the checkable deposits component is
    the largest.
    M1 is sometimes referred to as the broad definition of the money
    supply.
    Time deposits are a part of M1 but not M2.
    M1 is a larger dollar figure than M2.

    Required reserves are the amount of_________________.

    reserves a bank must hold against its deposits as mandated by the
    Federal Reserve
    cash a bank must hold against its deposits as mandated by the
    Federal Reserve
    checkable deposits a bank must hold against all other deposits as
    mandated by the U.S. Treasury
    reserves a bank must hold against all its assets as mandated by the
    Federal Reserve

    Bank A has deposits of $5,000 and reserves of $1,800. If the
    required-reserve ratio is 0.20, the bank has required reserves of
    ________________.

    $1,000
    $2,000
    $3,000
    $4,000

    The Federal Reserve System is the__________________.

    federal government agency that collects taxes and spends these
    receipts on tanks, bridges, employees' salaries, etc.
    company that delivers packages to your front door
    central bank of the United States
    federal government agency that collects and disseminates all the
    economic data that economists are interested in

    If the Fed wants to increase the money supply through an open market
    operation, it will

    purchase government securities .
    sell government securities.
    First purchase, then sell, government securities.
    Lend more reserves to commercial banks.

    The sale of a government security by the Fed

    decreases the supply of money.
    increases the supply of money.
    decreases the demand for money.
    increases the demand for money.

    The Fed can change the money supply by changing

    the required-reserve ratio.
    marginal income tax rates.
    federal excise taxes.
    unemployment benefits.

    The larger the simple deposit multiplier,

    the larger the required-reserve ratio.
    the smaller the required-reserve ratio.
    the smaller the change in the money supply for a given change in
    deposits.
    the less likely the Fed will be to use its monetary policy tools.

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    Solution Preview

    General Economics

    In recent years, the federal tax that generated the largest
    percentage of federal tax revenues has been the

    corporate income tax.
    social security tax.
    personal income tax.
    sales tax

    Corporate income tax ( this is the largest contributor to fed tax ref: http://www.irs.gov/taxstats/index.html)

    Which of the following is a correct listing of money's functions?

    Source of credit, value of transaction costs, unit of barter
    Medium of barter, medium of exchange, medium of transactions
    Unit of barter, unit of account, a unit of income
    Store of value, medium of exchange, unit of account

    Store of value, medium of exchange and unit of account. ( the others include barter that is ruled out)

    Which of the following statements is true?

    Of the three components of M1, the checkable deposits component is
    the largest.
    M1 is sometimes referred to as the broad definition of the money
    ...

    Solution Summary

    General Economics is studied.

    $2.19