During hyperinflations A) the value of money rises rapidly. B) money no longer functions as a good store of value and people may resort to barter transactions on a much larger scale. C) middle-class savers benefit as prices rise. D) money’s value remains fixed to the price level; that is, if prices double so does […]
Date: September 10th, 2020
The originate-to-distribute business model has a serious ________ problem since the mortgage broker has little incentive to make sure that the mortgagee is a good credit risk. A) principal-agent B) debt deflation C) democratization of credit D) collateralized debt ANSWER A
Date: September 10th, 2020
In an open economy, total income is the sum of exports and imports. Indicate whether the statement is true or false ANSWER FALSE
Date: September 10th, 2020
What are the effects of two independent variables that are highly correlated? What can be done to remedy the problem? What will be an ideal response? ANSWER The high correlation between two variables is called multicollinearity. Multicollinearity results in the standard errors of the coefficients of the independent variables to be inflated, yielding statistically […]
Date: September 10th, 2020
Which of the following is NOT a source of borrowings for a bank? A) federal funds B) Eurodollars C) transaction deposits D) discount loans ANSWER C
Date: September 10th, 2020
Everything else held constant, a decrease in the value of the dollar relative to all foreign currencies means that the price of foreign goods purchased by Americans A) increases B) decreases. C) remains unchanged. D) either increases, decreases, or remains unchanged. ANSWER A
Date: September 10th, 2020
Because inflation in Germany after World War I sometimes exceeded 1,000 % per month, one can conclude that the German economy suffered from A) deflation. B) disinflation. C) hyperinflation. D) superdeflation. ANSWER C
Date: September 10th, 2020
Briefly describe the three key points managers must consider when using expert opinion, consumer surveys, test marketing, and price experiments in analyzing consumer behavior. What will be an ideal response? ANSWER Managers must consider whether the participating groups are truly representative of the larger population, whether the answers given in these formats represent actual […]
Date: September 10th, 2020
Open market sale of government securities results in: A) an increase in bank reserves. B) a decrease in bank reserves. C) a decrease in interest rates. D) none of the above. ANSWER B
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
