Open market purchase of government securities by the Fed increases the federal funds rate. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
Although an improvement in technology enables perfectly competitive firms to earn a positive economic profit in the short run, entry by new firms will ensure that those profits are eliminated over time. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
Diminishing marginal returns occur when: A) units of a variable input are added to a fixed input and total product falls. B) units of a variable input are added to a fixed input and marginal product falls. C) the size of the plant is increased in the long run. D) the quantity of the fixed […]
Date: September 10th, 2020
In general, large current account deficits have to be financed by: A) capital outflows abroad. B) capital inflows from abroad. C) trade barriers. D) none of the above. ANSWER B
Date: September 10th, 2020
The nine directors of the Federal Reserve Banks are split into three categories: ________ are professional bankers, ________ are leaders from industry, and ________ are to represent the public interest and are not allowed to be officers, employees, or stockholders of banks. A) 5; 2; 2 B) 2; 5; 2 C) 4; 2; 3 D) […]
Date: September 10th, 2020
The Federal Reserve Bank of ________ houses the open market desk. A) Boston B) New York C) Chicago D) San Francisco ANSWER B
Date: September 10th, 2020
Of the following, the largest is A) money market deposit accounts. B) demand deposits. C) M1. D) M2. ANSWER D
Date: September 10th, 2020
If a bank has $100,000 of checkable deposits, a required reserve ratio of 20 percent, and it holds $40,000 in reserves, then the maximum deposit outflow it can sustain without altering its balance sheet is A) $30,000. B) $25,000. C) $20,000. D) $10,000. ANSWER B
Date: September 10th, 2020
According to the segmented markets theory of the term structure A) bonds of one maturity are close substitutes for bonds of other maturities, therefore, interest rates on bonds of different maturities move together over time. B) the interest rate for each maturity bond is determined by supply and demand for that maturity bond. C) investors’ […]
Date: September 10th, 2020
You can borrow $5000 to finance a new business venture. This new venture will generate annual earnings of $251. The maximum interest rate that you would pay on the borrowed funds and still increase your income is A) 25%. B) 12.5%. C) 10%. D) 5%. ANSWER D
Date: September 10th, 2020
