The difference of rate-sensitive liabilities and rate-sensitive assets is known as the A) duration. B) interest-sensitivity index. C) rate-risk index. D) gap. ANSWER D
Date: September 10th, 2020
Everything else held constant, a depreciation of the domestic currency will cause the IS curve to shift to the ________ and aggregate demand will ________. A) right; increase B) right; decrease C) left; increase D) left; decrease ANSWER A
Date: September 10th, 2020
The three players in the money supply process include A) banks, depositors, and the U.S. Treasury. B) banks, depositors, and borrowers. C) banks, depositors, and the central bank. D) banks, borrowers, and the central bank. ANSWER C
Date: September 10th, 2020
All else constant, an improvement in technology would cause a firm’s marginal, average variable, and average total cost functions to increase (graphically, shift up). Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
Distinguish between real and nominal GDP. Which one is a better measure of the business cycle? What will be an ideal response? ANSWER Nominal GDP is the value of currently produced final goods and services measured in current year prices. Real GDP is the value of currently produced final goods and services measured in […]
Date: September 10th, 2020
According to the Lucas critique, if past increases in the short-term interest rate have always been temporary, then A) the term-structure relationship using past data will then show only a weak effect of changes in the short-term interest rate on the long-term rate. B) the term-structure relationship using past data will show no effect of […]
Date: September 10th, 2020
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
Date: September 10th, 2020
A consol paying $20 annually when the interest rate is 5 percent has a price of A) $100. B) $200. C) $400. D) $800. ANSWER C
Date: September 10th, 2020
The Justice Department is most likely to oppose a proposed merger on the basis of the Herfindahl-Hirschman Index when the post-merger HHI is: A) less than 100. B) less than 1000. C) between 1000 and 1800. D) greater than 1800. ANSWER D
Date: September 10th, 2020
Of the three players in the money supply process, most observers agree that the most important player is A) the United States Treasury. B) the Federal Reserve System. C) the FDIC. D) the Office of Thrift Supervision. ANSWER B
Date: September 10th, 2020
