Economics of Money, Banking, and Financial Markets 10th Edition

ISBN 13

978-0132770248

ISBN 10

0132770245

Authors

Frederic S. Mishkin

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161 Exam Prep documents found.

Exam Prep

BUS 100 Quiz 3

1) Everything else held constant, if aggregate output is to the ________ of the LM curve, then there is an excess supply of money which will cause the interest rate to ________ A) right; fall B) right; rise C) left; fall D) left; rise Answer: C Answer: C Answer: C 2) A $1000 face value coupon bond with

Economics of Money-- Banking-- and Financial Markets 10th Edition

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BUS 201 Homework

1) According to Tobin's q theory, when q is ________, firms will not purchase new investment goods because the market value of firms is ________ relative to the cost of capital A) low; low B) low; high C) high; low D) high; high Answer: A Answer: A Answer: A 2) If the optimal forecast of the return on

Economics of Money-- Banking-- and Financial Markets 10th Edition

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BUS 217 Quiz

1) One way of describing the solution that high net worth provides to the moral hazard problem is to say that it A) collateralizes the debt contract B) makes the debt contract incentive compatible C) state verifies the debt contract D) removes all of the risk in the debt contract Answer: B Answer: B Answer: B 2) The

Economics of Money-- Banking-- and Financial Markets 10th Edition

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BUS 238 Midterm

1) The ________ interest rate is adjusted for expected changes in the price level A) ex ante real B) ex post real C) ex post nominal D) ex ante nominal Answer: A Answer: A Answer: A 2) If additional information is not used when forming an optimal forecast because it is not available at that time, then expectations

Economics of Money-- Banking-- and Financial Markets 10th Edition

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BUS 240 Midterm

1) Which of the following statements about the characteristics of debt and equities is true? A) They can both be long-term financial instruments B) Bond holders are residual claimants C) The income from bonds is typically more variable than that from equities D) Bonds pay dividends Answer: A Answer: A Answer: A 2) Everything else held constant, a

Economics of Money-- Banking-- and Financial Markets 10th Edition

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BUS 246 Midterm

1) Complete Milton Friedman's famous proposition: "Inflation is always and everywhere a ________ phenomenon" A) monetary B) political C) policy D) budgetary Answer: A Answer: A Answer: A 2) Kevin purchasing concert tickets with his debit card is an example of the ________ function of money A) medium of exchange B) unit of account C) store of value D) specialization Answer: A Answer: A Answer:

Economics of Money-- Banking-- and Financial Markets 10th Edition

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BUS 260 Homework

1) When the economy slips into a recession, normally the demand for bonds ________, the supply of bonds ________, and the interest rate ________, everything else held constant A) increases; increases; rises B) decreases; decreases; falls C) increases; decreases; falls D) decreases; increases; rises Answer: B Answer: B Answer: B 2) The figure above illustrates the effect of

Economics of Money-- Banking-- and Financial Markets 10th Edition

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BUS 319 Final

1) If policymakers set a target for unemployment that is too low because it is less than the natural rate of unemployment, this can set the stage for a higher rate of money growth and A) cost-push inflation B) demand-pull inflation C) cost-pull inflation D) demand-push inflation Answer: B Answer: B Answer: B 2) When a new depositor

Economics of Money-- Banking-- and Financial Markets 10th Edition

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BUS 395 Quiz 3

1) In Irving Fisher's quantity theory of money, velocity was determined by A) interest rates B) real GDP C) the institutions in an economy that affect individuals' transactions D) the price level Answer: C Answer: C Answer: C 2) Everything else held constant, an increase in the cost of production ________ aggregate ________ A) increases; demand B) decreases; demand C) increases;

Economics of Money-- Banking-- and Financial Markets 10th Edition

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BUS 417

1) An increase in productivity in a country will cause its currency to ________ because it can produce goods at a ________ price, everything else held constant A) depreciate; lower B) appreciate; lower C) depreciate; higher D) appreciate; higher Answer: B Answer: B Answer: B 2) If the required reserve ratio is 10 percent, currency in circulation is

Economics of Money-- Banking-- and Financial Markets 10th Edition

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BUS 492 Quiz

1) Prior to 2008, bank managers looked on reserve requirements A) as a tax on deposits B) as a subsidy on deposits C) as a subsidy on loans D) as a tax on loans Answer: A Answer: A Answer: A 2) The view that expectations change relatively slowly over time in response to new information is known in

Economics of Money-- Banking-- and Financial Markets 10th Edition

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BUS 528 Midterm 2

1) Debt deflation occurs when A) an economic downturn causes the price level to fall and a deterioration in firms' net worth because of the increased burden of indebtedness B) rising interest rates worsen adverse selection and moral hazard problems C) lenders reduce their lending due to declining stock prices (equity deflation) that

Economics of Money-- Banking-- and Financial Markets 10th Edition

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BUS 547 Midterm 2

1) Financial institutions that accept deposits and make loans are called ________ institutions A) investment B) contractual savings C) depository D) underwriting Answer: C Answer: C Answer: C 2) ________ in the domestic interest rate causes the demand for domestic assets to shift to the left and the domestic currency to ________, everything else held constant A) An increase;

Economics of Money-- Banking-- and Financial Markets 10th Edition

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BUS 591 Midterm 1

1) Everything else held constant, a decrease in the currency-checkable deposit ratio will mean A) an increase in currency in circulation and an increase in the money supply B) an increase in money supply C) a decrease in the money supply D) an increase in currency in circulation but no change in the money supply Answer:

Economics of Money-- Banking-- and Financial Markets 10th Edition

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BUS 619

1) An expansionary monetary policy raises firms' cash flows by ________ interest rates A) lowering real B) lowering nominal C) raising real D) raising nominal Answer: B Answer: B Answer: B 2) Members of the Executive Board of the European System of Central Banks are appointed to ________ year, nonrenewable terms A) four B) eight C) ten D) fourteen Answer: B Answer: B Answer: B 3)

Economics of Money-- Banking-- and Financial Markets 10th Edition

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BUS 630 Quiz 3

1) Using the one-period valuation model, assuming a year-end dividend of $011, an expected sales price of $110, and a required rate of return of 10%, the current price of the stock would be A) $11011 B) $12112 C) $10010 D) $10011 Answer: C Answer: C Answer: C 2) Since the early 1990s, the Fed has conducted monetary

Economics of Money-- Banking-- and Financial Markets 10th Edition

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BUS 634 Quiz

1) Everything else held constant, a decrease in the cost of production ________ aggregate ________ A) increases; demand B) decreases; demand C) increases; supply D) decreases; supply Answer: C Answer: C Answer: C 2) Prior to 2008, the bank's cost of holding reserves equaled A) the interest paid on deposits times the amount of reserves B) the interest paid on

Economics of Money-- Banking-- and Financial Markets 10th Edition

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BUS 685 Test 2

1) The ________ states that exchange rates between any two currencies will adjust to reflect changes in the price levels of the two countries A) theory of purchasing power parity B) law of one price C) theory of money neutrality D) quantity theory of money Answer: A Answer: A Answer: A 2) According to the quantity theory of

Economics of Money-- Banking-- and Financial Markets 10th Edition

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BUS 896

1) Conditions that likely contributed to a credit crunch during the global financial crisis include: A) capital shortfalls caused in part by falling real estate prices B) regulated hikes in bank capital requirements C) falling interest rates that raised interest rate risk, causing banks to choose to hold more capital D) increases in reserve

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Business 100

1) Which of the following can be described as involving direct finance? A) A corporation issues new shares of stock B) People buy shares in a mutual fund C) A pension fund manager buys a short-term corporate security in the secondary market D) An insurance company buys shares of common stock in the over-the-counter

Economics of Money-- Banking-- and Financial Markets 10th Edition

Exam Prep

Business 256

1) If you expect the inflation rate to be 15 percent next year and a one-year bond has a yield to maturity of 7 percent, then the real interest rate on this bond is A) 7 percent B) 22 percent C) -15 percent D) -8 percent Answer: D Answer: D Answer: D 2) An increase in the domestic

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Business 288 Midterm

1) Cutting the money supply by one-third is predicted by the quantity theory of money to cause A) a sharp decline in real output of one-third in the short run, and a fall in the price level by one-third in the long run B) a decline in real output by one-third C) a

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Business 289 Quiz 3

1) When the Fed wants to raise interest rates after banks have accumulated large amounts of excess reserves, it would A) increase the interest rate paid on excess reserves B) increase discount rate C) increase the required reserve ratio D) conduct massive open market purchase Answer: A Answer: A Answer: A 2) When the interest rate changes, A) the

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Business 308 Quiz

1) If the required reserve ratio is 15 percent, the simple deposit multiplier is A) 150 B) 15 C) 667 D) 333 Answer: C Answer: C Answer: C 2) Suppose that from a new checkable deposit, First National Bank holds two million dollars in vault cash, nine million dollars in excess reserves, and faces a required reserve ratio

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Business 429 Midterm

1) Increasing transactions costs of selling an asset make the asset A) more valuable B) more liquid C) less liquid D) more moneylike Answer: C Answer: C Answer: C 2) The "Greenspan doctrine" - central banks should not try to prick bubbles - was based on which of the following arguments? A) Asset-price bubbles are nearly impossible to identify B)

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Business 459 Midterm 2

1) Which of the following is not a disadvantage of of the Fed's "just do it" approach to monetary policy? A) There is low transparency of policy B) There is low accountability for central bankers C) This type of policy relies on the policy-makers in charge D) It relies on a stable money-inflation relationship Answer:

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Business 465 Midterm 2

1) Which of the following is most likely to lead to inflationary monetary policy? A) Declining oil prices B) Resolution of conflict in the Middle East C) The enactment of a free-trade agreement with Mexico D) Rising government budget deficits Answer: D Answer: D Answer: D 2) Which of the following is not one of the eight basic

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Business 507 Quiz 3

1) Everything else held constant, if the expected return on RST stock declines from 12 to 9 percent and the expected return on XYZ stock declines from 8 to 7 percent, then the expected return of holding RST stock ________ relative to XYZ stock and demand for XYZ stock ________ A)

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Business 525 Midterm 2

1) Bruce the Bank Manager can reduce interest rate risk by ________ the duration of the bank's assets to increase their rate sensitivity or, alternatively, ________ the duration of the bank's liabilities A) shortening; lengthening B) shortening; shortening C) lengthening; lengthening D) lengthening; shortening Answer: A Answer: A Answer: A 2) In the long-run the ISLM model predicts

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Business 568

1) If expectations are formed rationally, then individuals A) will have a forecast that is 100% accurate all of the time B) change their forecast when faced with new information C) use only the information from past data on a single variable to form their forecast D) have forecast errors that are persistently low Answer:

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Business 576 Midterm

1) When interest rates rise in the United States (with the price level fixed), the value of the dollar ________, domestic goods become ________ expensive, and net exports ________ A) falls; less; fall B) falls; more; rise C) rises; more; fall D) rises; less; fall Answer: C Answer: C Answer: C 2) A common element in all of

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Business 626

1) When the level of unplanned inventory investment is equal to zero, the economy is A) in disequilibrium B) in a recession C) in equilibrium D) overheating Answer: C Answer: C Answer: C 2) Deposit insurance is only one type of government safety net All of the following are types of government support for troubled financial institutions except A)

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Business 722 Homework

1) Looking at the Net Interest Margin indicates that the poor bank performance in the late 1980s A) was not the result of interest-rate movements B) was not the result of risky loans made in the early 1980s C) resulted from a narrowing of the gap between interest earned on assets and inters

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Business 728 Quiz 3

1) Although it has a population about half that of the United States, Japan has A) many more banks B) about 25 percent of the number of banks C) more than 5000 commercial banks D) fewer than 100 commercial banks Answer: D Answer: D Answer: D 2) All else equal, the ________ the coupon rate on a bond,

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Business 731 Midterm

1) Loophole mining refers to financial innovation designed to A) hide transactions from the IRS B) conceal transactions from the SEC C) get around regulations D) conceal transactions from the Treasury Department Answer: C Answer: C Answer: C 2) If workers do not believe that policymakers are serious about fighting inflation, they are most likely to push for

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Business 806

1) Which of the following statements about financial markets and securities is true? A) A bond is a long-term security that promises to make periodic payments called dividends to the firm's residual claimants B) A debt instrument is intermediate term if its maturity is less than one year C) A debt instrument is

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Business 862 Homework

1) China is trying to move its banking system from being strictly ________ owned by having them issue shares overseas A) state B) domestic investor C) depositor D) domestic corporate Answer: A Answer: A Answer: A 2) ________ in the domestic interest rate causes the demand for domestic assets to increase and the domestic currency to ________, everything

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Business 864 Homework

1) The growth of the subprime mortgage market led to A) increased demand for houses and helped fuel the boom in housing prices B) a decline in the housing industry because of higher default risk C) a decrease in home ownership as investors chose other assets over housing D) decreased demand for houses as

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Business 872 Homework

1) A discount bond A) pays the bondholder a fixed amount every period and the face value at maturity B) pays the bondholder the face value at maturity C) pays all interest and the face value at maturity D) pays the face value at maturity plus any capital gain Answer: B Answer: B Answer: B 2) The theory

Economics of Money-- Banking-- and Financial Markets 10th Edition

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GP 115 Quiz

1) Suppose on any given day the prevailing equilibrium federal funds rate is above the Federal Reserve's federal funds target rate If the Federal Reserve wishes for the federal funds rate to be at their target level, then the appropriate action for the Federal Reserve to take is a ________

Economics of Money-- Banking-- and Financial Markets 10th Edition

Exam Prep

GP 161

1) Even if the Fed could completely control the money supply, monetary policy would have critics because A) the Fed is asked to achieve many goals, some of which are incompatible with others B) the Fed's goals do not include high employment, making labor unions a critic of the Fed C) the Fed's

Economics of Money-- Banking-- and Financial Markets 10th Edition

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GP 198 Final

1) The disruption to financial markets starting in August 2007 that caused both consumer and business spending to fall A) shifted the aggregate demand curve to the right B) shifted the aggregate demand curve to the left C) shifted the aggregate supply curve to the right D) shifted the aggregate supply curve to the

Economics of Money-- Banking-- and Financial Markets 10th Edition

Exam Prep

GP 211 Quiz 3

1) From the standpoint of ________, specialization in lending is surprising but makes perfect sense when one considers the ________ problem A) moral hazard; diversification B) diversification; moral hazard C) adverse selection; diversification D) diversification; adverse selection Answer: D Answer: D Answer: D 2) If a member of the nonbank public sells a government bond to the Federal

Economics of Money-- Banking-- and Financial Markets 10th Edition

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GP 281

1) When stock prices fall A) an individual's wealth is not affected nor is their willingness to spend B) a business firm will be more likely to sell stock to finance investment spending C) an individual's wealth may decrease but their willingness to spend is not affected D) an individual's wealth may decrease and

Economics of Money-- Banking-- and Financial Markets 10th Edition

Exam Prep

GP 282 Test 1 1 A Decrease In The

1) A decrease in the foreign interest rate causes the demand for domestic assets to ________ and the domestic currency to ________, everything else held constant A) increase; appreciate B) increase; depreciate C) decrease; appreciate D) decrease; depreciate Answer: A Answer: A Answer: A 2) Everything else held constant, a weaker dollar will likely hurt A) textile exporters in

Economics of Money-- Banking-- and Financial Markets 10th Edition

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GP 321 Quiz 3

1) There are two types of investment: ________ investmentthe spending by business firms on equipment and structures, and planned spending on residential housesand ________ investmentspending by business firms on additional holdings of raw materials, parts, and finished goods A) planned; gross B) planned; inventory C) fixed; gross D) fixed; inventory Answer: D Answer: D Answer: D 2) An

Economics of Money-- Banking-- and Financial Markets 10th Edition

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GP 345 Test

1) An expansionary monetary policy shifts the LM curve to the ________, reducing ________, everything else held constant A) left; output and increasing interest rates B) left; both real output and interest rates C) right; both interest rates and real output D) right; interest rates and increasing real output Answer: D Answer: D Answer: D 2) Everything else

Economics of Money-- Banking-- and Financial Markets 10th Edition

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GP 348 Midterm 1

1) Savings and loan associations are regulated by the A) Federal Reserve System B) Securities and Exchange Commission C) Office of the Comptroller of the Currency D) Office of Thrift Supervision Answer: D Answer: D Answer: D 2) The economy recovers quickly from most recessions, but the increase in adverse selection and moral hazard problems in the credit

Economics of Money-- Banking-- and Financial Markets 10th Edition

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GP 469 Quiz 1

1) What is the return on a 5 percent coupon bond that initially sells for $1,000 and sells for $900 next year? A) 5 percent B) 10 percent C) -5 percent D) -10 percent Answer: C Answer: C Answer: C 2) Under a fixed exchange rate regime, if a country has an ________ exchange rate, then its central

Economics of Money-- Banking-- and Financial Markets 10th Edition

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GP 473

1) One of the concerns of increased bank consolidation is the reduction in community banks which could result in A) less lending to small businesses B) loss of cultural identity C) higher interest rates D) more bank regulation Answer: A Answer: A Answer: A 2) Because shifts in aggregate demand are not viewed as being particularly important to aggregate

Economics of Money-- Banking-- and Financial Markets 10th Edition

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GP 531 Quiz 3

1) If a bank has $10 million of checkable deposits, a required reserve ratio of 10 percent, and it holds $2 million in reserves, then it will not have enough reserves to support a deposit outflow of A) $12 million B) $11 million C) $1 million D) $900,000 Answer: A Answer: A Answer: A 2) Everything else held

Economics of Money-- Banking-- and Financial Markets 10th Edition

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GP 532 Quiz 3

1) A lesson of the Enron collapse is that government regulation A) always fails B) can reduce but not eliminate asymmetric information C) increases the problem of asymmetric information D) should be reduced Answer: B Answer: B Answer: B 2) The originate-to-distribute business model has a serious ________ problem since the mortgage broker has little incentive to make

Economics of Money-- Banking-- and Financial Markets 10th Edition

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GP 595 Test 2

1) Because of the presence of asymmetric information problems in credit markets, an expansionary monetary policy causes a ________ in net worth, which ________ the adverse selection problem, thereby ________ increased lending to finance investment spending A) decline; increases; encouraging B) rise; increases; discouraging C) rise; reduces; encouraging D) decline; reduces; discouraging Answer: C Answer: C Answer:

Economics of Money-- Banking-- and Financial Markets 10th Edition

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GP 611

1) State whether the following statement is true or false AND explain why: "An increase in the interest rate paid on excess reserves will always cause an increase in the federal reserve funds rate" Answer: False If the interest rate paid on excess reserves is set below the federal funds rate,

Economics of Money-- Banking-- and Financial Markets 10th Edition

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GP 618

1) The IS curve shifts to the left when A) taxes increase B) government spending increases C) the money supply increases D) autonomous planned investment spending increases Answer: A Answer: A Answer: A 2) Everything else held constant, if a central bank makes an unsterilized sale of foreign assets, then the domestic money supply will ________ and the

Economics of Money-- Banking-- and Financial Markets 10th Edition

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GP 680

1) Everything else held constant, if a central bank makes an unsterilized ________ of foreign assets, then the domestic money supply will decrease and the domestic currency will ________ A) purchase; appreciate B) purchase; depreciate C) sale; appreciate D) sale; depreciate Answer: C Answer: C Answer: C 2) Reasons regulators chose to follow regulatory forbearance rather than to close

Economics of Money-- Banking-- and Financial Markets 10th Edition

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GP 690 Test

1) Credit risk management tools include A) deductibles B) collateral C) interest rate swaps D) duration analysis Answer: B Answer: B Answer: B 2) Federal deposit insurance covers deposits up to $250,000, but as part of a doctrine called "too-big-to-fail" the FDIC sometimes ends up covering all deposits to avoid disrupting the financial system When the FDIC does

Economics of Money-- Banking-- and Financial Markets 10th Edition

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GP 712 Test 1

1) Because policies in the United States were too expansionary from 1965 through 1973, the US suffered A) demand-pull inflation B) cost-push inflation, as workers sought higher wages in order to keep up with inflation C) both demand-pull and cost-push inflation D) neither demand-pull nor cost-push inflation Answer: A Answer: A Answer: A 2) Which of the following

Economics of Money-- Banking-- and Financial Markets 10th Edition

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GP 720

1) The portfolio theories of money demand state that the demand for real money balances is ________ related to income and ________ related to the nominal interest rate A) positively; negatively B) positively; positively C) negatively; negatively D) negatively; positively Answer: A Answer: A Answer: A 2) The Phillips curve indicates that when the labor market is ________,

Economics of Money-- Banking-- and Financial Markets 10th Edition

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GP 720 Quiz 3

1) The quantity theory of inflation indicates that if the aggregate output is growing at 3% per year and the growth rate of money is 5%, then inflation is A) 2% B) 8% C) -2% D) 16% Answer: A Answer: A Answer: A 2) The money supply is ________ related to the nonborrowed monetary base, and ________ related

Economics of Money-- Banking-- and Financial Markets 10th Edition

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GP 722

1) During the 1950s, Fed monetary policy targeted A) the monetary base B) the exchange rate C) discount loans D) interest rates Answer: D Answer: D Answer: D 2) In the early stages of the 1980s banking crisis, financial institutions were especially harmed by A) declining interest rates from late 1979 until 1981 B) the severe recession in 1981-82 C) the

Economics of Money-- Banking-- and Financial Markets 10th Edition

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GP 776 Test 2

1) Everything else held constant, in the market for reserves, when the demand for federal funds intersects the reserve supply curve along the horizontal section, increasing the discount rate A) increases the federal funds rate B) lowers the federal funds rate C) has no effect on the federal funds rate D) has an indeterminate effect

Economics of Money-- Banking-- and Financial Markets 10th Edition

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GP 809

1) Banks face the problem of ________ in loan markets because bad credit risks are the ones most likely to seek bank loans A) adverse selection B) moral hazard C) moral suasion D) intentional fraud Answer: A Answer: A Answer: A 2) The Dow reached a peak of over 11,000 before the collapse of the ________ bubble in

Economics of Money-- Banking-- and Financial Markets 10th Edition

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GP 856 Test 2

1) Every financial market has the following characteristic: A) It determines the level of interest rates B) It allows common stock to be traded C) It allows loans to be made D) It channels funds from lenders-savers to borrowers-spenders Answer: D Answer: D Answer: D 2) From before the financial crisis began in September of 2007 to when

Economics of Money-- Banking-- and Financial Markets 10th Edition

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GSM 254 Quiz

1) Macroeconomic equilibrium requires A) equilibrium in the goods market B) equilibrium in the money market C) equilibrium in both the goods and money markets D) equilibrium in neither the goods nor the money market Answer: C Answer: C Answer: C 2) Which of the following instruments are traded in a capital market? A) Corporate bonds B) US Treasury bills C)

Economics of Money-- Banking-- and Financial Markets 10th Edition

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GSM 265 Quiz 3

1) When the IS and LM curves are combined in the same diagram, the intersection of the two curves determines the equilibrium level of ________ as well as the ________ A) aggregate output; price level B) aggregate output; interest rate C) money supply; price level D) consumer expenditures; interest rate Answer: B Answer: B Answer: B 2) Because

Economics of Money-- Banking-- and Financial Markets 10th Edition

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GSM 266 Quiz

1) When financial intermediaries deleverage, firms cannot fund investment opportunities resulting in A) a contraction of economic activity B) an economic boom C) an increased opportunity for growth D) a call for government regulation Answer: A Answer: A Answer: A 2) If the Federal Reserve conducts open market ________, the money supply ________, shifting the LM curve to

Economics of Money-- Banking-- and Financial Markets 10th Edition

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GSM 283 Final

1) In order to reduce risk and increase the safety of financial institutions, commercial banks and other depository institutions are prohibited from A) owning municipal bonds B) making real estate loans C) making personal loans D) owning common stock Answer: D Answer: D Answer: D 2) A decrease in the foreign interest rate causes the demand for domestic

Economics of Money-- Banking-- and Financial Markets 10th Edition

Exam Prep

GSM 302 Midterm 2

1) The teal book is the Fed research document containing A) the forecast of national economic variables for the next three years B) forecasts of the money aggregates conditional on different monetary policy stances C) information on the state of the economy in each Federal Reserve district D) both A and B E) A, B

Economics of Money-- Banking-- and Financial Markets 10th Edition

Exam Prep

GSM 347 Test 1

1) The problem created by asymmetric information before the transaction occurs is called ________, while the problem created after the transaction occurs is called ________ A) adverse selection; moral hazard B) moral hazard; adverse selection C) costly state verification; free-riding D) free-riding; costly state verification Answer: A Answer: A Answer: A 2) Tobin's q theory suggests that monetary

Economics of Money-- Banking-- and Financial Markets 10th Edition

Exam Prep

GSM 354

1) Using the Gordon growth model, if D1 is $50, ke is 7%, and g is 5%, then the present value of the stock is A) $250 B) $25 C) $50 D) $4673 Answer: B Answer: B Answer: B 2) In the liquidity trap, monetary policy A) has a large impact on interest rates B) has a small impact on interest

Economics of Money-- Banking-- and Financial Markets 10th Edition

Exam Prep

GSM 415

1) The research document given to the Federal Open Market Committee that contains information on the state of the economy in each Federal Reserve district is called the A) beige book B) green book C) blue book D) black book Answer: A Answer: A Answer: A 2) Today the United States has a dual banking system in which

Economics of Money-- Banking-- and Financial Markets 10th Edition

Exam Prep

GSM 417

1) To calculate the growth rate of a variable, you will A) calculate the percentage change from one time period to the next B) calculate the difference between the two variables C) add the ending value to the beginning value D) divide the increase by the number of time periods Answer: A Answer: A Answer: A 2) When

Economics of Money-- Banking-- and Financial Markets 10th Edition

Exam Prep

GSM 417 1 The Revenue A Government

1) The revenue a government gains from issuing money is A) interest B) rent C) seignorage D) the national dividend E) the inflation tax Answer: C Answer: C Answer: C 2) If actual output is less than equilibrium output, firms will ________ output to keep from ________ inventories A) increase; accumulating B) increase; depleting C) decrease; depleting D) decrease; accumulating Answer: B Answer: B Answer: B 3)

Economics of Money-- Banking-- and Financial Markets 10th Edition

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GSM 495 1 In The Liquidity

1) In the liquidity preference framework, a one-time increase in the money supply results in a price level effect The maximum impact of the price level effect on interest rates occurs A) at the moment the price level hits its peak (stops rising) because both the price level and expected inflation

Economics of Money-- Banking-- and Financial Markets 10th Edition

Exam Prep

GSM 523 Test 1

1) With a 10 percent interest rate on dollar deposits, and an expected appreciation of 7 percent over the coming year, the expected return on dollar deposits in terms of the foreign currency is A) 3 percent B) 10 percent C) 135 percent D) 17 percent Answer: D Answer: D Answer: D 2) Which of the following are

Economics of Money-- Banking-- and Financial Markets 10th Edition

Exam Prep

GSM 538 Quiz

1) Mutual savings banks are owned by A) shareholders B) partners C) depositors D) foreign investors Answer: C Answer: C Answer: C 2) If a bank has excess reserves of $7,000 and demand deposit liabilities of $100,000, and if the reserve requirement is 10 percent, then the bank has actual reserves of A) $14,000 B) $17,000 C) $22,000 D) $27,000 Answer: B Answer: B Answer:

Economics of Money-- Banking-- and Financial Markets 10th Edition

Exam Prep

GSM 616 Quiz

1) The absence of money illusion means that A) as real income doubles, the demand for money doubles B) as interest rates double, the demand for money doubles C) as the money supply doubles, the demand for money doubles D) as the price level doubles, the demand for money doubles Answer: D Answer: D Answer: D 2) A

Economics of Money-- Banking-- and Financial Markets 10th Edition

Exam Prep

GSM 628

1) Under a fixed exchange rate regime, if the domestic currency is initially overvalued, that is, below par, the central bank must intervene to purchase the ________ currency by selling ________ assets A) domestic; foreign B) domestic; domestic C) foreign; foreign D) foreign; domestic Answer: A Answer: A Answer: A 2) A financial market in which only short-term

Economics of Money-- Banking-- and Financial Markets 10th Edition

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GSM 667 Quiz 3

1) At the time of the South Korean financial crisis, the merchant banks were A) almost virtually unregulated B) subject to heavy government regulation C) engaged in long-term lending to the corporate sector D) restricted to long-term foreign borrowing Answer: A Answer: A Answer: A 2) Banks are important to the study of money and the economy because

Economics of Money-- Banking-- and Financial Markets 10th Edition

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GSM 709 Midterm

1) Small-denomination time deposits refer to certificates of deposit with a denomination of less than A) $1,000 B) $10,000 C) $100,000 D) $1,000,000 Answer: C Answer: C Answer: C 2) According to aggregate demand and supply analysis, the rising oil prices coupled with the global financial crisis in 2007-2008 caused the unemployment rate to ________ and the level of

Economics of Money-- Banking-- and Financial Markets 10th Edition

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GSM 722 Final

1) The Fed's discount lending is of three types: ________ is the most common category; ________ is given to a limited number of banks in vacation and agricultural areas; ________ is given to banks that have experienced severe liquidity problems A) seasonal credit; secondary credit; primary credit B) secondary credit; seasonal credit; primary

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Management 107 Midterm 1

1) The time it takes for policy makers to change policy instruments once they have decided on the new policy is called A) the data lag B) the recognition lag C) the legislative lag D) the implementation lag E) the effectiveness lag Answer: D Answer: D Answer: D 2) Stockholders are residual claimants, meaning that they A) have the first

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Management 204 Midterm 1

1) Each Fed bank president attends FOMC meetings; although only ________ Fed bank presidents vote on policy, all ________ provide input A) three; ten B) five; ten C) three; twelve D) five; twelve Answer: D Answer: D Answer: D 2) Suppose the economy is producing at the natural rate of output A decrease in consumer and business confidence will

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Management 244 Quiz 3

1) The decline in traditional banking internationally can be attributed to A) increased regulation B) improved information technology C) increasing monopoly power of banks over depositors D) increased protection from competition Answer: B Answer: B Answer: B 2) Everything else held constant, when bonds become less widely traded, and as a consequence the market becomes less liquid, the

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Management 276 Quiz

1) Everything else held constant, an increase in net taxes ________ aggregate ________ A) increases; demand B) decreases; demand C) decreases; supply D) increases; supply Answer: B Answer: B Answer: B 2) Which investment bank filed for bankruptcy on September 15, 2008 making it the largest bankruptcy filing in US history? A) Lehman Brothers B) Merrill Lynch C) Bear Stearns D) Goldman

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Management 300 Test

1) As the relative expected return on dollar assets increases, foreigners will want to hold more ________ assets and less ________ assets, everything else held constant A) foreign; foreign B) foreign; dollar C) dollar; foreign D) dollar; dollar Answer: C Answer: C Answer: C 2) Evidence from the United States and other foreign countries indicates that A) there is a

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Management 357 Test

1) The price of a consol equals the coupon payment A) times the interest rate B) plus the interest rate C) minus the interest rate D) divided by the interest rate Answer: D Answer: D Answer: D 2) If the money supply is $600 and nominal income is $3,600, the velocity of money is A) 1/60 B) 1/6 C) 6 D) 60 Answer:

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Management 390 Test

1) Compared to checks, paper currency and coins have the major drawbacks that they A) are easily stolen B) are hard to counterfeit C) are not the most liquid assets D) must be backed by gold Answer: A Answer: A Answer: A 2) Everything else held constant, if consumption expenditure falls by 160 when disposable income falls by

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Management 407

1) Suppose the economy is producing at the natural rate of output Assuming a fixed natural rate of output and everything else held constant, the development of a new, more productive technology will cause ________ in the unemployment rate in the short run and ________ in inflation in the short

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Management 412 Midterm 2

1) The Federal Home Loan Bank Board and the FSLIC, both of which failed in their regulatory tasks, were abolished by the A) Competitive Equality Banking Act of 1987 B) Financial Institutions Reform, Recovery and Enforcement Act of 1989 C) Office of Thrift Supervision D) Office of the Comptroller of the Currency Answer: B Answer: B Answer:

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Management 414

1) A smart card is the equivalent of A) cash B) savings bonds C) savings deposits D) certificates of deposit Answer: A Answer: A Answer: A 2) When the price level ________, the demand curve for money shifts to the ________ and the interest rate ________, everything else held constant A) falls; left; falls B) rises; right; falls C) falls; left;

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Management 436 Midterm 2

1) In the long-run ISLM model and with everything else held constant, the long-run effect of an expansionary monetary policy is to A) increase real output and the interest rate B) not change either real output or the interest rate C) increase real output and leave the interest rate unchanged D) increase the interest

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Management 492 Midterm

1) If real GDP in 2002 is $10 trillion, and in 2003 real GDP is $95 trillion, then real GDP growth from 2002 to 2003 is A) 05% B) 5% C) 0% D) -5% Answer: D Answer: D Answer: D 2) The spectacular growth in international banking can be explained by A) the rapid growth in international trade B) the

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Management 537 Test 1

1) Conflicts of interest are a type of ________ problem that can happen when an institution provides multiple services A) adverse selection B) free-riding C) discounting D) moral hazard Answer: D Answer: D Answer: D 2) The ability to use one resource to provide different products and services is A) economies of scale B) economies of scope C) diversification D) vertical integration Answer:

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Management 539 Quiz 3

1) A corporation acquires new funds only when its securities are sold in the A) secondary market by an investment bank B) primary market by an investment bank C) secondary market by a stock exchange broker D) secondary market by a commercial bank Answer: B Answer: B Answer: B 2) Assuming the same coupon rate and maturity length,

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Management 567 Quiz 3

1) Modern liability management has resulted in A) increased sales of certificates of deposits to raise funds B) increase importance of deposits as a source of funds C) reduced borrowing by banks in the overnight loan market D) failure by banks to coordinate management of assets and liabilities Answer: A Answer: A Answer: A 2) The existence of

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Management 614 Quiz 3

1) The economic hardship resulting from a financial crises is severe, however, there are also social consequences such as A) increased crime B) difficulty getting a loan C) currency devaluations D) loss of output Answer: A Answer: A Answer: A 2) With ________, firms value assets on their balance sheet at what they would sell for in the

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Management 655 Test

1) Banks acquire the funds that they use to purchase income-earning assets from such sources as A) cash items in the process of collection B) savings accounts C) reserves D) deposits at other banks Answer: B Answer: B Answer: B 2) In the simple model of multiple deposit creation in which banks do not hold excess reserves, the

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Management 761 Test 2

1) A tax cut initially A) increases consumption expenditure by an amount greater than the tax cut B) increases consumption expenditure by an amount equal to the tax cut C) increases consumption expenditure by an amount that is less than the value of the tax cut D) has no effect on consumption expenditure E) reduces consumption

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Management 818

1) If Treasury deposits at the Fed are predicted to fall, the manager of the trading desk at the New York Fed bank will likely conduct ________ open market operations to ________ reserves A) defensive; inject B) defensive; drain C) dynamic; inject D) dynamic; drain Answer: B Answer: B Answer: B 2) Everything else held constant, an increase

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Management 825 Quiz

1) In the period 1965 through the 1970s, policymakers pursued ________ policies in order to achieve ________ A) expansionary; high employment B) expansionary; low inflation C) contractionary; high employment D) contractionary; low inflation Answer: A Answer: A Answer: A 2) The delivery of financial services electronically is called A) e-business B) e-commerce C) e-finance D) e-possible Answer: C Answer: C Answer: C 3) Bank capital has

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MG 121 Test

1) Because banks engage in regulatory arbitrage, the Basel Accord on risk-based capital requirements may result in A) reduced risk taking by banks B) reduced supervision of banks by regulators C) increased fraudulent behavior by banks D) increased risk taking by banks Answer: D Answer: D Answer: D 2) When compared to exchange systems that rely on money, disadvantages

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MG 178 Test 1

1) A credit market instrument that pays the owner a fixed coupon payment every year until the maturity date and then repays the face value is called a A) simple loan B) fixed-payment loan C) coupon bond D) discount bond Answer: C Answer: C Answer: C 2) The too-big-to-fail policy A) reduces moral hazard problems B) puts large banks at

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MG 246

1) Suppose the economy is producing at the natural rate of output An open market sale of bonds by the Fed will cause ________ in real GDP in the long run and ________ in inflation in the long run, everything else held constant A) an increase; an increase B) a decrease; a

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MG 384

1) The nominal interest rate minus the expected rate of inflation A) defines the real interest rate B) is a less accurate measure of the incentives to borrow and lend than is the nominal interest rate C) is a less accurate indicator of the tightness of credit market conditions than is the nominal

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MG 396

1) Nonactivists of the policies believe that A) wages and prices are very flexible B) the self-correcting mechanism is very rapid C) government action is unnecessary D) all of the above Answer: D Answer: D Answer: D 2) Everything else held constant, a decrease in planned investment expenditure ________ aggregate ________ A) increases; demand B) decreases; demand C) decreases; supply D) increases;

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MG 470 Quiz 2

1) Assuming initially that rr = 15%, c = 40%, and e = 5%, an increase in e to 10% causes the M1 money multiplier to ________, everything else held constant A) increase from 215 to 233 B) decrease from 233 to 215 C) increase from 154 to 167 D) decrease from 167 to

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MG 530 Test 2

1) Bank's make their profits primarily by issuing A) equity B) negotiable CDs C) loans D) NOW accounts Answer: C Answer: C Answer: C 2) ________ occurs when market participants observe returns on a security that are larger than what is justified by the characteristics of that security and take action to quickly eliminate the unexploited profit opportunity A)

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MG 622 Test 1

1) The difference between merchandise exports and imports is called the ________ balance A) current account B) capital account C) official reserve transactions D) trade Answer: D Answer: D Answer: D 2) The reduction in transactions costs per dollar of investment as the size of transactions increases is A) discounting B) economies of scale C) economies of trade D) diversification Answer: B Answer: B Answer: B 3)

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MG 623 Midterm 1

1) Which of the following is not an advantage of inflation targeting? A) There is simplicity and clarity of the target B) Inflation targeting does not rely on a stable money-inflation relationship C) There is an immediate signal on the achievement of the target D) Inflation targeting reduces the effects of inflation shocks Answer: C Answer:

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MG 632 Final

1) An increase in the quantity of money supplied shifts the money supply curve to the ________ and the LM curve to the ________, everything else held constant A) right; left B) right; right C) left; left D) left; right Answer: B Answer: B Answer: B 2) In the market for reserves, if the federal funds rate is

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MG 717 Test

1) Everything else held constant, if aggregate output is to the right of the IS curve, then there is an excess ________ of goods which will cause aggregate output to ________ A) supply; fall B) supply; rise C) demand; fall D) demand; rise Answer: A Answer: A Answer: A 2) In the 1950s the interest rate on three-month

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MG 750

1) Long-term debt has a maturity that is A) between one and ten years B) less than a year C) between five and ten years D) ten years or longer Answer: D Answer: D Answer: D 2) In general, banks would prefer to acquire funds quickly by ________ rather than ________ A) reducing loans; selling securities B) reducing loans; borrowing

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MG 778 Midterm 1

1) When the Federal Reserve calls in a discount loan from a bank, the monetary base ________ and reserves ________ A) remains unchanged; decrease B) remains unchanged; increase C) decreases; decrease D) decreases; remains unchanged Answer: C Answer: C Answer: C 2) Inflation targets can increase the central bank's flexibility in responding to declines in aggregate spending Declines in

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MG 816

1) Everything else held constant, if the expected return on ABC stock rises from 5 to 10 percent and the expected return on CBS stock is unchanged, then the expected return of holding CBS stock ________ relative to ABC stock and the demand for CBS stock ________ A) rises; rises B) rises; falls C)

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MG 841 Midterm

1) During World War II, whenever interest rates would rise and the price of bonds would begin to fall, the Fed would A) lower reserve requirements B) raise reserve requirements C) make open market purchases of government securities D) make open market sales of government securities Answer: C Answer: C Answer: C 2) The goal for high employment

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MG 850 Final

1) In the simple deposit expansion model, a decline in checkable deposits of $500 when the required reserve ratio is equal to 20 percent implies that the Fed A) sold $250 in government bonds B) sold $100 in government bonds C) sold $50 in government bonds D) purchased $100 in government bonds Answer: B Answer: B Answer: B 2)

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MG 890 Quiz 1

1) Everything else held constant, changes in the interest rate affect planned investment spending and hence the equilibrium level of output, but this change in investment spending A) merely causes a movement along the IS curve and not a shift B) is crowded out by higher taxes C) is crowded out by higher

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MG 892

1) A simple deposit multiplier equal to one implies a required reserve ratio equal to A) 100 percent B) 50 percent C) 25 percent D) 0 percent Answer: A Answer: A Answer: A 2) In response to the overvalued dollar in the early 1970s, the German Bundesbank bought ________ and sold ________ to keep the exchange rate fixed,

Economics of Money-- Banking-- and Financial Markets 10th Edition

Exam Prep

MOB 122

1) If the money supply is $600 and nominal income is $3,000, the velocity of money is A) 1/50 B) 1/5 C) 5 D) 50 Answer: C Answer: C Answer: C 2) When we say that money is a stock variable, we mean that A) the quantity of money is measured at a given point in time B) we must

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MOB 218 Midterm 1

1) An increase in the expected future domestic exchange rate causes the demand for domestic assets to ________ and the domestic currency to ________, everything else held constant A) increase; appreciate B) increase; depreciate C) decrease; appreciate D) decrease; depreciate Answer: A Answer: A Answer: A 2) Which bank regulatory agency has the sole regulatory authority over bank

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MOB 224 Homework

1) The time it takes for policy makers to be sure of what the data are signaling about the future course of the economy is called A) the data lag B) the recognition lag C) the legislative lag D) the implementation lag E) the effectiveness lag Answer: B Answer: B Answer: B 2) Economists define investment as the purchase of A)

Economics of Money-- Banking-- and Financial Markets 10th Edition

Exam Prep

MOB 291 Homework

1) Everything else held constant, a stronger dollar benefits ________ and hurts ________ A) American businesses; American consumers B) American businesses; foreign businesses C) American consumers; American businesses D) foreign businesses; American consumers Answer: C Answer: C Answer: C 2) High-powered money minus currency in circulation equals A) reserves B) the borrowed base C) the nonborrowed base D) discount loans Answer: A Answer: A Answer:

Economics of Money-- Banking-- and Financial Markets 10th Edition

Exam Prep

MOB 388 Test 1

1) Suppose that from a new checkable deposit, First National Bank holds two million dollars in vault cash, eight million dollars on deposit with the Federal Reserve, and nine million dollars in excess reserves Given this information, we can say First National Bank faces a required reserve ratio of ________ percent A)

Economics of Money-- Banking-- and Financial Markets 10th Edition

Exam Prep

MOB 418 Test 1

1) Suppose that from a new checkable deposit, First National Bank holds two million dollars in vault cash, eight million dollars on deposit with the Federal Reserve, and nine million dollars in excess reserves Given this information, we can say First National Bank has ________ million dollars in required reserves A) one B)

Economics of Money-- Banking-- and Financial Markets 10th Edition

Exam Prep

MOB 454 Quiz 3

1) In the long-run ISLM model and with everything else held constant, as long as the level of output ________ the natural rate level, the price level will continue to ________, shifting the LM curve to the ________, until finally output is back at the natural rate level A) exceeds; rise;

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MOB 461

1) In the Keynesian cross diagram, an increase in investment spending because companies become more optimistic about investment profitability causes the aggregate demand function to shift ________ and the equilibrium level of aggregate output to ________, everything else held constant A) up; rise B) up; fall C) down; rise D) down; fall Answer: A Answer: A Answer:

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MOB 489 Quiz

1) Which of the following are primary concerns of the bank manager? A) Maintaining sufficient reserves to minimize the cost to the bank of deposit outflows B) Extending loans to borrowers who will pay low interest rates, but who are poor credit risks C) Acquiring funds at a relatively high cost, so that

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MOB 511 Midterm

1) Using the information contained in Situation 20-1, if autonomous consumption increases by $100, then equilibrium aggregate output will change by A) -$1,000 B) -$100 C) $100 D) $1,000 Answer: D Situation 20-1 Assume a closed economy with no government Suppose that autonomous consumption equals $400, planned investment equals $500, and the mpc equals 09 Answer:

Economics of Money-- Banking-- and Financial Markets 10th Edition

Exam Prep

MOB 524

1) In the figure above, a factor that could cause the supply of bonds to increase (shift to the right) is: A) a decrease in government budget deficits B) a decrease in expected inflation C) expectations of more profitable investment opportunities D) a business cycle recession Answer: C Answer: C Answer: C 2) Other things equal, a decrease

Economics of Money-- Banking-- and Financial Markets 10th Edition

Exam Prep

MOB 575

1) If Treasury deposits at the Fed are predicted to ________, the manager of the trading desk at the New York Fed bank will likely conduct ________ open market operations to ________ reserves A) increase; defensive; inject B) decrease; defensive; inject C) increase; dynamic; inject D) decrease; dynamic; drain Answer: A Answer: A Answer: A 2) Franco Modigliani has

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MOB 576 Test 2

1) The net amount of international reserves that move between governments to finance international transactions is called the ________ balance A) capital account B) current account C) trade D) official reserve transactions Answer: D Answer: D Answer: D 2) If borrowers with the most risky investment projects seek bank loans in higher proportion to those borrowers with the

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MOB 593

1) Assume a bank has $200 million of assets with a duration of 25, and $190 million of liabilities with a duration of 105 If interest rates increase from 5 percent to 6 percent, the net worth of the bank falls by A) $1 million B) $24 million C) $36 million D) $48 million Answer:

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MOB 620 Midterm 2

1) Although the National Bank Act of 1863 was designed to eliminate state-chartered banks by imposing a prohibitive tax on banknotes, these banks have been able to stay in business by A) issuing credit cards B) ignoring the regulations C) acquiring funds through deposits D) branching into other states Answer: C Answer: C Answer: C 2) In the Keynesian

Economics of Money-- Banking-- and Financial Markets 10th Edition

Exam Prep

MOB 623 Quiz

1) If float is predicted to decrease because of good weather, the manager of the trading desk at the New York Fed bank will likely conduct ________ open market operations to ________ reserves A) defensive; inject B) defensive; drain C) dynamic; inject D) dynamic; drain Answer: A Answer: A Answer: A 2) Bank capital is equal to ________ minus

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MOB 641

1) The Fed's use of the ________ as an operating target in the 1970s resulted in ________ monetary policy A) federal funds rate; countercyclical B) federal funds rate; procyclical C) M1 money supply; countercyclical D) M1 money supply; procyclical Answer: B Answer: B Answer: B 2) With a 10 percent interest rate on dollar deposits, and an expected

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MOB 653 Test

1) Critics of nationwide banking fear A) an elimination of community banks B) increased lending to small businesses C) cutthroat competition D) banks with economies of scale problems Answer: A Answer: A Answer: A 2) If a contractionary monetary policy lowers the price level by more than expected, it raises the real value of consumer debt This reduces

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MOB 680 Midterm 1

1) Everything else held constant, when the government has higher budget deficits A) the demand curve for bonds shifts to the left and the interest rate rises B) the demand curve for bonds shifts to the left and the interest rate falls C) the supply curve for bonds shifts to the right and

Economics of Money-- Banking-- and Financial Markets 10th Edition

Exam Prep

MOB 743

1) On January 25, 2009, one US dollar traded on the foreign exchange market for about 333 Romanian new lei Therefore, one Romanian new lei would have purchased about ________ US dollars A) 030 B) 186 C) 286 D) 333 Answer: A Answer: A Answer: A 2) The key factor leading to the financial crises in Mexico and

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MOB 747

1) The starting point for understanding how exchange rates are determined is a simple idea called ________, which states: if two countries produce an identical good, the price of the good should be the same throughout the world no matter which country produces it A) Gresham's law B) the law of one

Economics of Money-- Banking-- and Financial Markets 10th Edition

Exam Prep

MOB 827 Test 1

1) Recent research indicates that inflation performance (low inflation) has been found to be best in countries with A) the most independent central banks B) political control of monetary policy C) money financing of budget deficits D) a policy of always keeping interest rates low Answer: A Answer: A Answer: A 2) Suppose that from a new checkable

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MSC 107 Final

1) Unemployment resulting from a mismatch of workers' skills and job requirements is called A) frictional unemployment B) structural unemployment C) seasonal unemployment D) cyclical unemployment Answer: B Answer: B Answer: B 2) In the Keynesian cross diagram, an increase in autonomous consumer expenditure causes the aggregate demand function to shift ________, the equilibrium level of aggregate output

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MSC 121 Quiz 3

1) Referring to the Economic Stimulus Act of 2008, the expansionary effect of the government stimulus was overwhelmed by the continuing deterioration in credit market conditions Everything else held constant and using the ISLM model, the net effect would cause the ________ curve to ________ and output will ________ A) IS; shift

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MSC 172 Midterm

1) Which of the following items are not counted in US GDP? A) your purchase of a new Ford Mustang B) your purchase of new tires for your old car C) GM's purchase of tires for new cars D) a foreign consumer's purchase of a new Ford Mustang Answer: C Answer: C Answer: C 2) In the market

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MSC 234 Midterm 1

1) In the market for reserves, if the federal funds rate is between the discount rate and the interest rate paid on excess reserves, an increase in the reserve requirement ________ the demand for reserves, ________ the federal funds rate, everything else held constant A) decreases; lowering B) increases; lowering C) increases; raising D)

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MSC 235 Test 2

1) If your nominal income in 1998 is $50,000, and prices increase by 50% between 1998 and 2011, then to have the same real income, your nominal income in 2011 must be A) $50,000 B) $75,000 C) $100,000 D) $150,000 Answer: B Answer: B Answer: B 2) Under the Bretton Woods system, the IMF could encourage deficit countries

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MSC 274 Test

1) One reason financial systems in developing and transition countries are underdeveloped is A) they have weak links to their governments B) they make loans only to nonprofit entities C) the legal system may be poor making it difficult to enforce restrictive covenants D) the accounting standards are too stringent for the banks to

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MSC 278 Final

1) In the Gordon growth model, a decrease in the required rate of return on equity A) increases the current stock price B) increases the future stock price C) reduces the future stock price D) reduces the current stock price Answer: A Answer: A Answer: A 2) On paper, the Bank of Canada has ________ instrument independence and

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MSC 280 Quiz 3

1) A financial crisis occurs when an increase in asymmetric information from a disruption in the financial system A) causes severe adverse selection and moral hazard problems that make financial markets incapable of channeling funds efficiently B) allows for a more efficient use of funds C) increases economic activity D) reduces uncertainty in the

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MSC 294

1) Bonds that are sold in a foreign country and are denominated in the country's currency in which they are sold are known as A) foreign bonds B) Eurobonds C) equity bonds D) country bonds Answer: A Answer: A Answer: A 2) The actual execution of open market operations is done at A) the Board of Governors in Washington,

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MSC 313 Test 2

1) A debt instrument sold by a bank to its depositors that pays annual interest of a given amount and at maturity pays back the original purchase price is called A) commercial paper B) a negotiable certificate of deposit C) a municipal bond D) federal funds Answer: B Answer: B Answer: B 2) Member commercial banks have purchased

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MSC 320 Homework

1) The trend in recent years is that more and more governments A) have been granting greater independence to their central banks B) have been reducing the independence of their central banks to make them more accountable for poor economic performance C) have mandated that their central banks focus on controlling inflation D) have

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MSC 366 Midterm 2

1) Foreign banks may engage in banking activities in the United States by opening all of the following except A) an agency office of the foreign bank B) a subsidiary US bank C) a branch of the foreign bank D) a McFadden Corporation Answer: D Answer: D Answer: D 2) When a member of the nonbank public deposits

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MSC 383 Quiz 3

1) In the Keynesian cross diagram, an increase in investment spending because companies become more optimistic about investment profitability causes the aggregate demand function to shift up, the equilibrium level of aggregate output to ________, and the IS curve to shift to the ________, everything else held constant A) rise; left B) rise;

Economics of Money-- Banking-- and Financial Markets 10th Edition

Exam Prep

MSC 403 Quiz 1

1) A decrease in the expected future domestic exchange rate causes the demand for domestic assets to ________ and the domestic currency to ________, everything else held constant A) increase; appreciate B) increase; depreciate C) decrease; appreciate D) decrease; depreciate Answer: D Answer: D Answer: D 2) American farmers who sell beef to Europe benefit most from A) a

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MSC 443 Quiz 2

1) In the figure above, one factor not responsible for the decline in the demand for money is A) a decline the price level B) a decline in income C) an increase in income D) a decline in the expected inflation rate Answer: C Answer: C Answer: C 2) Banks develop statistical models to calculate their maximum loss

Economics of Money-- Banking-- and Financial Markets 10th Edition

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MSC 489 Quiz 3

1) The interest rate the Fed charges banks borrowing from the Fed is the A) federal funds rate B) Treasury bill rate C) discount rate D) prime rate Answer: C Answer: C Answer: C 2) If the economy is on the IS curve, but is to the left of the LM curve, aggregate output will ________ and the interest

Economics of Money-- Banking-- and Financial Markets 10th Edition

Exam Prep

MSC 588 Test 1

1) Banks hold capital because A) they are required to by regulatory authorities B) higher capital increases the returns to the owners C) it increases the likelihood of bankruptcy D) higher capital increases the return on equity Answer: A Answer: A Answer: A 2) The most common type of discount lending, ________ credit loans, are intended to help

Economics of Money-- Banking-- and Financial Markets 10th Edition

Exam Prep

MSC 652 Midterm 2

1) When banks calculate the losses the institution would incur if an unusual combination of bad events happened, the bank is using the ________ approach A) stress-test B) value-at-risk C) trading-loss D) maximum value Answer: A Answer: A Answer: A 2) In the generalized dividend model, the current stock price is the sum of A) the actual value of

Economics of Money-- Banking-- and Financial Markets 10th Edition

Exam Prep

MSC 866 Midterm 1 Everything Else

1) Everything else held constant, when a country's currency depreciates, its goods abroad become ________ expensive while foreign goods in that country become ________ expensive A) more; less B) more; more C) less; less D) less; more Answer: D Answer: D Answer: D 2) On January 25, 2009, one US dollar traded on the foreign exchange market for

Economics of Money-- Banking-- and Financial Markets 10th Edition

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Economics of Money, Banking, and Financial Markets 10th Edition

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Anna

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Hill

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Kristopher

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Trusted by Thousands of
Students