The government agency that oversees the banking system and is responsible for the conduct of monetary policy in the United States is A) the Federal Reserve System. B) the United States Treasury. C) the U.S. Gold Commission. D) the House of Representatives. ANSWER A
Date: September 10th, 2020
Equity of U.S. companies can be purchased by A) U.S. citizens only. B) foreign citizens only. C) U.S. citizens and foreign citizens. D) U.S. mutual funds only. ANSWER C
Date: September 10th, 2020
Many financial analysts use GDP as a measure of the economy’s performance. However, GDP has several shortcomings in terms of measuring economic well-being. State at least three such shortcomings and explain how each affects the validity of GDP as a measure of economic well-being. ANSWER 1 ) GDP does not include the value of […]
Date: September 10th, 2020
Expansionary monetary policy should be used if: A) aggregate demand-aggregate supply equilibrium is below potential output. B) aggregate demand-aggregate supply equilibrium is above potential output. C) aggregate demand-aggregate supply equilibrium is equal to potential output. D) none of the above. ANSWER A
Date: September 10th, 2020
Contractionary monetary policy should be used if: A) aggregate demand-aggregate supply equilibrium is below potential output. B) aggregate demand-aggregate supply equilibrium is above potential output. C) aggregate demand-aggregate supply equilibrium is equal to potential output. D) none of the above. ANSWER B
Date: September 10th, 2020
Everything else held constant, an increase in net taxes 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 D
Date: September 10th, 2020
The interest rate on a consol equals the A) price times the coupon payment. B) price divided by the coupon payment. C) coupon payment plus the price. D) coupon payment divided by the price. ANSWER D
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
