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
New information that might lead to a decrease in a stock’s price might be A) an expected decrease in the level of future dividends. B) a decrease in the required rate of return. C) an expected increase in the dividend growth rate. D) an expected increase in the future sales price. ANSWER A
Date: September 10th, 2020
If a bank has $50 million in rate-sensitive assets and $20 million in rate-sensitive liabilities then A) an increase in interest rates will reduce bank profits. B) a decrease in interest rates will reduce bank profits. C) interest rate changes will not impact bank profits. D) a decrease in interest rates will increase bank profits. […]
Date: September 10th, 2020
All of the following are considered to be problems associated with the use of concentration ratios to measure market power except: A) the market definitions used in their construction may be arbitrary. B) two different markets with the same concentration ratio may have very different distributions of market share among firms used to calculate the […]
Date: September 10th, 2020
Individuals that lend funds to a bank by opening a checking account are called A) policyholders. B) partners. C) depositors. D) debt holders. ANSWER C
Date: September 10th, 2020
