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1) The revenue a government gains from issuing money is
A) interest
B) rent
C) seignorage
D) the national dividend
E) the inflation tax
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
3) Experts predict that the future structure of the US banking industry will have
A) an increased number of banks
B) as few as ten banks
C) several thousand banks
D) a few hundred banks
4) The amount of assets per dollar of equity capital is called the
A) asset ratio
B) equity ratio
C) equity multiplier
D) asset multiplier
5) Banks are required to file ________ usually quarterly that list information on the
bank's assets and liabilities, income and dividends, and so forth
A) call reports
B) balance reports
C) regulatory sheets
D) examiner updates
6) The principal lender-savers are
A) governments
B) businesses
C) households
D) foreigners
7) Financial markets improve economic welfare because
A) they channel funds from investors to savers
B) they allow consumers to time their purchase better
C) they weed out inefficient firms
D) eliminate the need for indirect finance
8) According to rational expectations,
A) expectations of inflation are viewed as being an average of past inflation rates
B) expectations of inflation are viewed as being an average of expected future inflation
rates
C) expectations formation indicates that changes in expectations occur slowly over time
as past data change
D) expectations will not differ from optimal forecasts using all available information
9) In a(n) ________ market, dealers in different locations buy and sell securities to
anyone who comes to them and is willing to accept their prices
A) exchange
B) over-the-counter
C) common
D) barter
10) During the 2007-2009 financial crisis the excess reserve ratio
A) increased sharply
B) decreased sharply
C) increased slightly
D) decreased slightly
11) If a forecast is made using all available information, then economists say that the
expectation formation is
A) rational
B) irrational
C) adaptive
D) reasonable
