For long-term stopgap financing of large projects, city governments can issue
A) tax-anticipation notes.
B) bond-anticipation notes.
C) general obligation bonds.
D) revenue bonds.
According to the Keynesian view of the demand for money, an increase in uncertainty
will cause
A) a decrease in interest rates.
B) an increase in interest rates.
C) an increase in aggregate income.
D) an increase in consumption.
A person with two jobs is counted __________ in the household survey and
__________ in the establishment survey.
A) once; once
B) once; twice
C) twice; once
D) twice; twice
In the Keynesian model, interest rates are determined by
A) aggregate demand and aggregate supply.
B) saving and investment.
C) the demand for and supply of money.
D) the velocity of money.
The regulator that determines the permissible activities any bank may engage in is the
A) Federal Reserve.
B) FDIC.
C) House Banking Committee.
D) Comptroller of the Currency.
A limitation of the discount rate as a policy tool is that the initiative for its use rests
with
A) commercial banks.
B) consumers.
C) the U.S. Treasury.
D) state governments.
A bank can create new money only when
A) its reserves fall below the amount required by the Federal Reserve.
B) it has excess reserves.
C) its has vault cash.
D) it is loaned up.
If total Fed liabilities __________, then reserves have to __________, everything else
being equal.
A) fall; rise
B) rise; rise
C) fall; fall
D) None of the above.
A firm that can borrow from a bank any amount it wishes up to a certain limit, and at
any time up to a certain date, is said to have a
A) repurchase agreement.
B) trade credit.
C) a line of credit.
D) internal financing.
In most countries the central bank is
A) totally autonomous from the rest of government.
B) semi-independent from the rest of the government.
C) a part of the private sector.
D) subordinate to the rest of government.
It is true that __________ changes in velocity cause __________ changes in real GDP.
A) small; no
B) large; no
C) small; large
D) large; small
Which of these will cause the equilibrium interest rate to rise?
A) The savings rate decreases
B) Business borrowing decreases
C) The federal deficit decreases
D) Household borrowing increases
Insurance companies
A) are the major buyers of private placements for their own portfolio of assets.
B) help firms sell private placements.
C) sell their own private placements.
D) have nothing to do with private placements.
Starting from equilibrium in the ISLM framework, an increase in money demand results
in
A) a rise in income and the interest rate.
B) a rise in income and a decline in the interest rate.
C) a decline in income and the interest rate.
D) a decline in income and a rise in the interest rate.
A “Jumbo” CD is one in excess of
A) $1,000.
B) $10,000.
C) $50,000.
D) $100,000.
The segments of a CMO are also called
A) tranches.
B) coupons.
C) obligations.
D) revenues.
Firms with a continuous need for working capital financing will probably want to have
__________ with a bank.
A) credit rationing
B) individually negotiated loans
C) repurchase agreements
D) a line of credit