Archives: Quiz

105 CHAPTER 1 ENCOUNTERING FILM: FROM PREPRODUCTION TO EXHIBITION MULTIPLE-CHOICE QUESTIONS 1. Preproduction is A. before the cameras roll. B. when a project is in development. C. when funds are raised. D. when a crew is assembled. E. All of […]

39. Suppose the economy is thought to be 1 percent below its potential output (i.e., the output gap is −1 percent). The potential output is growing at 4% a year. Suppose the Fed is following the Taylor rule, with an […]

1. The systematic setting of policy according to a formula is known as a. credibility. b. an expectations trap. c. discretionary policy. d. a rule for monetary policy. 2. If monetary policy is not set by a rule, it is […]

38. Okun’s Law relates a. the unemployment gap and the inflation rate. b. the unemployment gap and the inflation gap. c. the inflation gap and the output gap. d. the unemployment gap and the output gap. 39. In an economy, […]

1. An increase in the money supply is an example of a(n) policy. a. countercyclical b. procyclical c. contractionary d. expansionary 2. The Fed uses monetary policy to cause the economy to grow faster in the short run. A(n) in […]

ANSWER: b POINTS: 1 DIFFICULTY: Basic TOPICS: Money Creation and Destruction by the Fed and by Banks OTHER: Factual ANSWER: c POINTS: 1 DIFFICULTY: Basic TOPICS: Money Creation and Destruction by the Fed and by Banks OTHER: Factual ANSWER: c […]

ANSWER: b POINTS: 1 DIFFICULTY: Basic TOPICS: Federal Reserve Banks OTHER: Factual ANSWER: c POINTS: 1 DIFFICULTY: Basic TOPICS: Federal Reserve Banks OTHER: Factual 1. There are Federal Reserve Banks located around the United States. a. seven b. ten c. […]

41. In broad real terms, the dollar a. depreciated against other currencies in the second half of the 1990s and in the early 2000s. b. depreciated against other currencies in the second half of the 1990s and appreciated against those […]

1. An unexpected change in an exogenous variable is known as a. a shock. b. a fluctuation. c. an anachronism. d. a calibration. 2. Which of the following statements is true? a. A shock affects all countries to the same […]

36. Researchers who support the RBC model found out that an RBC model could account for as much as fluctuations in output growth. a. 70 percent b. 60 percent c. 50 percent d. 75 percent 37. Critics of RBC models […]

1. A model in which actions that occur at one time affect what happens at other times is known as a. a dynamic model. b. a static model. c. a general-equilibrium model. d. a partial–equilibrium model. 2. A model that […]

38. In the aggregate demand-aggregate supply model, a decrease in the expected price level, everything else remaining unchanged, causes to in the short run. a. output; increase b. output; decline c. output; remain unchanged d. inflation; increase 39. In the […]

1. Aggregate demand tells us a. the amount of goods and services being purchased in an economy. b. the amount of goods and services being produced in an economy. c. the total demand for labor in an economy. d. the […]

39. In the liquidity-preference model, a decrease in the money supply causes a. the nominal interest rate to increase and the equilibrium quantity of money to decrease. b. the nominal interest rate to increase and the equilibrium quantity of money […]

1. In the ATM model of money, the opportunity cost of holding money is determined by a. the rate of inflation. b. the cost of going to an ATM. c. the charges levied on every ATM transaction. d. the nominal […]

41. In which of the following periods was total factor productivity growth the slowest in the U.S. economy? a. Long boom b. Economic liftoff period c. 1995−2005 d. Reorganization period 42. Business cycle refers to the a. rise and fall […]

1. In which period was the rate of output growth the fastest in the U.S. economy? a. 1929−1949 b. 1949−1970 c. 1970−1982 d. 1982−2010 2. The labor force consists of a. those employed plus those on temporary layoff. b. those […]

51. Which of the following is the purpose of the Bank Holding Company Act of 1956? a. To prevent bank holding companies from branching across state lines b. To allow bank holding companies to open branches across state lines c. […]

1. Which of the following is NOT a reason for the government to regulate banks? a. To reduce the externalities caused by bank problems b. To stabilize the money supply c. To prevent bank runs d. To keep banks large […]

36. The is a place where banks can request loans from the Federal Reserve. a. money market b. domestic trading desk c. Treasury d. discount window 37. The interest rate in the market for loans of reserves between banks is […]

1. A financial intermediary that accepts deposits from savers, and makes loans to borrowers is a a. stock exchange. b. bond market. c. bank. d. finance company. 2. When one party to a transaction knows more than another, the situation […]

50. In the CAPM, systematic risk a. is also known as idiosyncratic risk. b. can be diversified away. c. is also known as market risk. d. is the risk to a stock’s return that is not attributable to the fluctuations […]

1. Shareholders are also called a. bondholders. b. brokers. c. stockholders. d. debt-holders. 2. Which of the following statements is true? a. Stockholders benefit when the price of the stocks they hold rises and lose when the price of the […]

35. One way that homeowners and banks can share the risk of inflation is through a. fixed-rate mortgages. b. refinancing. c. default. d. adjustable-rate mortgages. 36. Investors can lock in a real interest rate and thus avoid most of the […]

1. The amount of interest paid on a debt security in dollar terms as a percent of the principal is referred to as the a. expected real interest rate. b. realized real interest rate. c. after-tax real interest rate. d. […]

35. Which of the following bonds has the greatest interest-rate risk? a. A one–year bond b. A five-year bond c. A ten-year bond d. A thirty-year bond 36. Which of the following bonds is likely to have the highest term […]

1. Which of the following is a security in which a saver buys the security for a given time to maturity, earning interest at the specified rate? a. Commercial paper b. Debenture c. Government bond d. Certificates of deposit 2. […]

42. Consider a coupon bond that pays $100 every year and repays its principal amount of $1,000 at the end of four years. If the annual rate of discount is 8 percent, the present value of the bond is a. […]

1. The amount of money invested in a financial security or deposited into a financial intermediary is referred to as the a. principal. b. interest. c. yield. d. capital-gain. 2. The amount of money that you would need to invest […]

ANSWER: b POINTS: 1 DIFFICULTY: Basic TOPICS: How We Use Money OTHER: Factual ANSWER: d POINTS: 1 DIFFICULTY: Basic TOPICS: How We Use Money OTHER: Factual 1. When people use money by trading it for goods and services, money is […]

94. The probabilities of different returns on a stock over the year are: Probability Return 10% −5% 15% 0% 20% 5% 30% 10% 25% 20% The standard deviation of the return on the stock is about percent. a. 5 b. […]

66. Suppose the quantity demanded for a security is BD = 150 − 0.1b, and the quantity supplied of the security is BS = 50 + 0.1b, where b is the price of the security in dollars. Suppose that the […]

1. The financial system consists of a. all the securities, intermediaries, and markets that exist to match savers and borrowers. b. all transactions occurring in the goods market during a financial year. c. all markets that exist to match the […]

ANSWER: c POINTS: 1 DIFFICULTY: Basic TOPICS: Introduction to Money and Banking OTHER: Factual ANSWER: d POINTS: 1 DIFFICULTY: Basic TOPICS: Introduction to Money and Banking OTHER: Factual 1. Economic policy affects a. only the amount of money in the […]

POINTS: 1 DIFFICULTY: Difficult LEARNING OBJECTIVES: DISC: International trade and fi – DISC: International trade and finance NATIONAL STANDARDS: United States – BPROG: Reflective Thinking – BPROG: Analysis ACCREDITING STANDARDS: International trade and finance TOPICS: International Aspects of Deficit Reduction […]

TOPICS: Fiscal and Monetary Policies in an Open Economy KEYWORDS: BLOOM’S: Comprehension 132. The sequence of events following a contractionary monetary policy would be higher interest rates followed by dollar a. depreciation, higher exports, and lower imports. b. depreciation, lower […]

LEARNING OBJECTIVES: DISC: Aggregate demand and aggre – DISC: Aggregate demand and aggregate supply NATIONAL STANDARDS: United States – BPROG: Analytic ACCREDITING STANDARDS: Aggregate demand and aggregate s – Aggregate demand and aggregate supply TOPICS: International Trade, Exchange Rates, and […]

True / False 1. In an open economy net exports must always be positive. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Moderate LEARNING OBJECTIVES: DISC: International trade and fi – DISC: International trade and finance NATIONAL STANDARDS: United […]

DIFFICULTY: Moderate LEARNING OBJECTIVES: DISC: Markets, market failure, a – DISC: Markets, market failure, and externalities NATIONAL STANDARDS: United States – BPROG: Analytic ACCREDITING STANDARDS: Markets, market failure, and ext – Markets, market failure, and externalities TOPICS: Why Try to […]

TOPICS: When Governments Fix Exchange Rate: The Balance Of Payments KEYWORDS: BLOOM’S: Comprehension 134. A balance of payments deficit is defined as the amount by which a. a country’s exports exceed its imports. b. a currency must appreciate in order […]

d. euro would be in equilibrium. ANSWER: b POINTS: 1 DIFFICULTY: Moderate LEARNING OBJECTIVES: DISC: Supply and demand NATIONAL STANDARDS: United States – BPROG: Analytic ACCREDITING STANDARDS: Supply and demand TOPICS: Exchange Rate Determination in a Free Market KEYWORDS: BLOOM’S: […]