If mortgage brokers do not make a strong effort to evaluate whether the borrower can pay off a loan, this creates a A) severe adverse selection problem. B) decline in mortgage applications. C) call to deregulate the industry. D) decrease in the demand for houses. ANSWER A
Date: September 10th, 2020
A(n) ________ in the liquidity of corporate bonds will ________ the price of corporate bonds and ________ the yield on corporate bonds, all else equal. A) increase; increase; decrease B) increase; decrease; decrease C) decrease; increase; increase D) decrease; decrease; decrease ANSWER A
Date: September 10th, 2020
Assume you have been hired to advise two different firms, A and B, regarding the price each firm should charge for its product, focusing on the amount each firm should mark up price over marginal cost. While both firms are price setters, the product produced by firm A is extremely unique and enjoys widespread appeal. […]
Date: September 10th, 2020
Exports are positively related to domestic income and negatively related to the exchange rate. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
A ________ pays out cash flows from a collection of assets in different tranches, with the highest-rated tranch paying out first, while lower ones paid out less if there are losses on the underlying assets. A) collateralized debt obligation (CDO) B) adjustable-rate mortgage C) negotiable CD D) discount bond ANSWER A
Date: September 10th, 2020
If merchants in the country Zed choose to close their doors, preferring to be stuck with rotting merchandise rather than worthless currency, then one can conclude that Zed is experiencing a A) superdeflation. B) hyperdeflation. C) disinflation. D) hyperinflation. ANSWER D
Date: September 10th, 2020
Capital inflows occur if foreign interest rates are greater than domestic interest rates. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
American farmers who sell beef to Europe benefit most from A) a decrease in the dollar price of euros. B) an increase in the dollar price of euros. C) a constant dollar price for euros. D) a European ban on imports of American beef. ANSWER B
Date: September 10th, 2020
An increase in the liquidity of corporate bonds will ________ the price of corporate bonds and ________ the yield of Treasury bonds, everything else held constant. A) increase; increase B) reduce; reduce C) increase; reduce D) reduce; increase ANSWER A
Date: September 10th, 2020
Is the profit-maximizing price-taking firm able to mark up price above the marginal costs of production at the profit-maximizing level of output? Why or why not? What will be an ideal response? ANSWER Because the demand for a price-taking firm’s output is perfectly elastic, the firm is unable to mark up price over the […]
Date: September 10th, 2020
