When the federal funds rate equals the discount rate A) the supply curve of reserves is vertical. B) the supply curve of reserves is horizontal. C) the demand curve for reserves is vertical. D) the demand curve for reserves is horizontal. ANSWER B
Date: September 10th, 2020
At a given price level, an increase in expected profits and business confidence will shift the aggregate demand curve: A) rightward. B) leftward. C) both. D) none of the above. ANSWER A
Date: September 10th, 2020
Unanticipated moral hazard contingencies can be reduced by A) screening. B) long-term customer relationships. C) specialization in lending. D) credit rationing. ANSWER B
Date: September 10th, 2020
By definition, in the typical firm’s short-run production function all inputs are fixed in amount. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
Under the European System of Central Banks, the Executive Board is similar in structure to the ________ of the Federal Reserve System. A) Board of Governors B) Federal Open Market Committee C) Federal Reserve Banks D) Federal Advisory Council ANSWER A
Date: September 10th, 2020
A problem with the CPI is the presence of a substitution bias on the behalf of consumers. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
The core rate of inflation is a measure of the relative price changes that excludes changes in energy and food prices. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
The Fed’s policy actions of reacting to higher inflation by raising the real interest rate during 2004-2006 were A) upward movements along the monetary policy curve. B) downward movement along the monetary policy curve. C) upward shifts of the monetary policy curve. D) downward shifts of the monetary policy curve. ANSWER A
Date: September 10th, 2020
Which of the following barriers to entry can best explain the continued success of a product that has been shown to be, in some way, harmful to the health of consumers? A) Patent. B) Consumer lock-in. C) Brand loyalty. D) Ownership of an essential resource. ANSWER C
Date: September 10th, 2020
A bank’s commitment to provide a firm with loans up to pre-specified limit at an interest rate that is tied to a market interest rate is called A) an adjustable gap loan. B) an adjustable portfolio loan. C) loan commitment. D) pre-credit loan line. ANSWER C
Date: September 10th, 2020
