When the firms in a perfectly competitive market are incurring economic losses, some of the firms will exit the market, causing the supply curve to shift left and market price to rise until losses incurred by the remaining firms are eliminated. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
The simple deposit multiplier is larger than the money multiplier. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
According to the expectations theory of the term structure A) when the yield curve is steeply upward sloping, short-term interest rates are expected to remain relatively stable in the future. B) when the yield curve is downward sloping, short-term interest rates are expected to remain relatively stable in the future. C) investors have strong preferences […]
Date: September 10th, 2020
The three largest Federal Reserve banks (New York, Chicago, and San Francisco) combined hold more than ________ percent of the assets of the Federal Reserve System. A) 25 B) 33 C) 50 D) 67 ANSWER C
Date: September 10th, 2020
Which of the following can be described as direct finance? A) You take out a mortgage from your local bank. B) You borrow $2500 from a friend. C) You buy shares of common stock in the secondary market. D) You buy shares in a mutual fund. ANSWER B
Date: September 10th, 2020
The principal lender-savers are A) governments. B) businesses. C) households. D) foreigners. ANSWER C
Date: September 10th, 2020
Changes in the amount of goods produced, but not sold in a given year is called: A) inventory investment B) business fixed investment C) residential fixed investment D) consumption ANSWER A
Date: September 10th, 2020
The “law of diminishing marginal returns” applies to: A) the short run, but not the long run. B) the long run, but not the short run. C) both the short run and the long run. D) neither the short run nor the long run. ANSWER A
Date: September 10th, 2020
Assume that you borrow $2000 at 10% annual interest to finance a new business project. For this loan to be profitable, the minimum amount this project must generate in annual earnings is A) $400. B) $201. C) $200. D) $199. ANSWER B
Date: September 10th, 2020
Which of the following is NOT included in the monetary aggregate M2? A) currency B) savings bonds C) traveler’s checks D) checking deposits ANSWER B
Date: September 10th, 2020
