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5 pages/≈1375 words
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Multiple Choice Questions
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Current Economics (Multiple Choice Questions Sample)


It involved reading an attached file and answering the multiple choice questions.


A. Age Shall Not Weary Her
1 What did the Aldrich Commission recommend?
I recommend that a large private association of banks that would issue its own currency to members facing runs be set
2 What was Woodrow Wilson’s directive?
Directed that the congress to rewrite the plan to reduce the influence of bankers at the 12 regional banks, making federal network and to add a board appointed by the president to oversee it.
3 At that point, what was the Fed’s mandate?
Supply elastic currency when banks were short of cash, they could borrow from Fed’s discount window.
4 According to this article, why did the Fed fail during the Depression?
It reverted to its original passivity, ceasing its open-market operations and permiting thousands of banks to fail. The real bill system retained its hold. It kept money tight, despite the collapse in prices and output when banks were not asking credit.
5 What were the key ingredients of the 1932 overhaul?
Commercial and investment banks were separated
Deposit insurance introduced
Fed was given more stewardship of the economy
6 What is Congress’ dual mandate?
Stable prices and full employment
7 How has the Fed contributed to its own strength?
* Stretched authority by lending to investment banks, insurance company and issuers of commercial paper to contain a crisis that originated outside deposit taking banks.
* It cut interest rates to zero and took monetary policy far into uncharted territory by buying bonds with newly printed money and committing to keep interest rates near zero for years to come.
8 What responsibilities has the Fed received from the President?
Oversight of any financial institution judged systematically important
Increase employment and create jobs
B. The Bond Bears
9 How does inflation impact bond prices?
Rising price reduces the buying power leading to lower bond prices. When inflation falls, the bond prices rise
10 What is America’s inflation rate?
For whom is debt a problem?
The highly indebted economies
What are the Goldilocks conditions of the 1990’s?
A growth is high whenever the inflation remains positive
What is the author’s conclusion?
There is a scope for a surprise
C. A Creeping Ascent
Chart 1
The economy grew steadily from January to December
Chart 2
Debt for US remained at 0.5$trillion from 2008 to 2010 and 0.7$ trillion in 2011 and 2012. For the rest of the world in 2008, it was 1.3$ trillion, then dropped to 0.9$ trillion in 2010, it rose to 1.0 in 2010 and remained same for 2011 and 2012 at 1.5$trillion
Chart 3
The debt deficient for each country dropped from 2009 to 2013 except for japan which rose in 2011 to 2012
Chart 4
GDP remained the same in 2007 to 2008, dropped in 2009 and rose in 2010. It remained constant till 2013 except for US which rose
Chart 5
THE Employment rate was high for Germany, Britain, US, Ireland, Spain and lowest for Greece in 2007/2008 peak and in 2013.
Chart 6
There was rising fines since 2008 till 2013
Chart 7
Loans reduced throughout for the US, from 4 to 3.5 in 2010-2013, for Britain it rose in 2010 and dropped in 2012 then rose in 2012 and dropped again by a smaller percentage in 2013. In the EURO area, it dropped in 2010, rose in 2011 and dropped. In mid 2012, it dropped again
Chart 8
Policy interest rate grew from 2007 to 2013 for Japan followed by Britain and lastly US.
Chart 9
The currencies against $ rose in January and dropped in march till august then rose till November and dropped again.
D. Petty Impressive
What was Petty’s most important invention?
Catamaran, it is a mechanical grain planter
Describe how Petty defined "quantity theory of money”.
The estimate of the amount of money required to maintain interest rate is derived by calculation of cash required in all transactions foe every year and how easily it can circulated.
How does Petty’s thought line up with Keynes?
Keynes said that since useless work was better than none, those who are not employed could have been paid to construct a pyramid on Salisbury Plains, or transit Stonehenge to London.
Why did Petty fall out of favor?
He came up with theories first, then test these theories against their data
Did not look for all inclusive theory of the world since he lacked a model of joining all markets
E.2013: The Year Men Became Obsolete?
What liberated women from daily drudgery?
Many have found a formula for asserting power and authority in the workplace while still projecting sexual allure and glamour
What percentage of college degrees were earned last year by women?
57% bachelors degrees, 60% masters degrees, 52% doctorate degrees
From 1980 – 2012, what change occurred for:
Labor force participation rate of men?
It declined by 7.2%
Labor force participation rate for women?
62% points increase
What types of jobs are overwhelmingly performed by men?
Dirty, dangerous work of building roads, pouring concrete, laying bricks, tarring roofs, hanging electric wires, excavating natural gas and sewage lines, cutting and clearing trees and buildozing the landscape.
F. Financing the New Economy
From the first story, the author gives three lessons. What are they?
* Commercial banks are not at the center of funding the new economy
* Federal government can still be a vital source of funding even when it is under attack in the tea party age.
* We have working examples of the kinds of cooperative banking and financial institutions we need in order to scale up our vision of the new economy
What percentage of United States profits does finance contribute?
What does the Community Reinvestment Act do?
Encouraged banks to invest in poor neighborhoods where they can accept deposits while vital is not clearly enough
What structure is the most common type of cooperative?
New windows cooperative
How are credit unions different?
They serve low income communities. They operate tight margins with tax exempt earnings and pay scale far below those of the commercial banking sector.
What is a correspondent bank?
Banks which process payments, offer loans and invest to credit union members
What is the movement in worker co-ops?
To have the co-ops fund their own growth and build e...
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