A credit market instrument that provides the borrower with an amount of funds that must be repaid at the maturity date along with an interest payment is known as a A) simple loan. B) fixed-payment loan. C) coupon bond. D) discount bond. ANSWER A
Date: September 10th, 2020
The ________ of the term structure of interest rates states that the interest rate on a long-term bond will equal the average of short-term interest rates that individuals expect to occur over the life of the long-term bond, and investors have no preference for short-term bonds relative to long-term bonds. A) segmented markets theory B) […]
Date: September 10th, 2020
Banks that actively manage liabilities will most likely meet a reserve shortfall by A) calling in loans. B) borrowing federal funds. C) selling municipal bonds. D) seeking new deposits. ANSWER B
Date: September 10th, 2020
Marginal cost is defined as: A) the change in total cost due to a one unit change in output. B) total cost divided by output. C) the change in output due to a one unit change in an input. D) total product divided by the quantity of input. ANSWER A
Date: September 10th, 2020
The natural rate of unemployment is also called: A) non-accelerating inflation rate of unemployment. B) accelerating inflation rate of unemployment. C) accelerating deflation rate of unemployment. D) none of the above. ANSWER A
Date: September 10th, 2020
Fill in the blanks to complete the following statements. “Assume a perfectly competitive market is initially in long-run equilibrium. In the short run, a decrease in raw materials prices will cause the firm’s average costs to ________. As a result, the profits of existing firms will ________. However, over the long run, this will cause […]
Date: September 10th, 2020
The expectations theory and the segmented markets theory do not explain the facts very well, but they provide the groundwork for the most widely accepted theory of the term structure of interest rates A) the Keynesian theory. B) the separable markets theory. C) the liquidity premium theory. D) the asset market approach. ANSWER C
Date: September 10th, 2020
A bank will want to hold more excess reserves (everything else equal) when A) it expects to have deposit inflows in the near future. B) brokerage commissions on selling bonds increase. C) the cost of selling loans falls. D) the discount rate decreases. ANSWER B
Date: September 10th, 2020
Which of the followings is NOT a current duty of the Board of Governors of the Federal Reserve System? A) setting margin requirements, the fraction of the purchase price of the securities that has to be paid for with cash B) setting the maximum interest rates payable on certain types of time deposits under Regulation […]
Date: September 10th, 2020
The producer price index measures: A) the prices consumers pay for final goods and services. B) the prices firms pay for crude and intermediate materials as well as finished goods. C) the prices the government pays for final goods and services. D) none of the above. ANSWER B
Date: September 10th, 2020
