The reserve requirement is 0.20. What is the simple deposit multiplier? A) 1 B) 5 C) 0.10 D) 100 ANSWER B
Date: September 10th, 2020
A restrictive monetary policy, all else equal, will: A) depreciate the domestic currency. B) appreciate the domestic currency. C) all of the above. D) none of the above. ANSWER B
Date: September 10th, 2020
When tax revenues are greater than government expenditures, the government has a budget A) crisis. B) deficit. C) surplus. D) revision. ANSWER C
Date: September 10th, 2020
Assume there is an increase in the price of electricity (which is the result of a decrease in the supply of electricity), and electricity and natural gas are substitutes. How would this affect the demand for natural gas, and what would happen to the equilibrium price and quantity of natural gas? ANSWER The increase […]
Date: September 10th, 2020
The organization responsible for the conduct of monetary policy in the United States is the A) Comptroller of the Currency. B) U.S. Treasury. C) Federal Reserve System. D) Bureau of Monetary Affairs. ANSWER C
Date: September 10th, 2020
A financial crisis occurs when an increase in asymmetric information from a disruption in the financial system A) causes severe adverse selection and moral hazard problems that make financial markets incapable of channeling funds efficiently. B) allows for a more efficient use of funds. C) increases economic activity. D) reduces uncertainty in the economy and […]
Date: September 10th, 2020
When money prices are used to facilitate comparisons of value, money is said to function as a A) unit of account. B) medium of exchange. C) store of value. D) payments-system ruler. ANSWER A
Date: September 10th, 2020
A major disruption in financial markets characterized by sharp declines in asset prices and firm failures is called a A) financial crisis. B) fiscal imbalance. C) free-rider problem. D) “lemons” problem. ANSWER A
Date: September 10th, 2020
Because it is more extensive, first-degree price discrimination is more profitable for the firm than is third-degree price discrimination. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
Bonds with relatively low risk of default are called ________ securities and have a rating of Baa (or BBB) and above; bonds with ratings below Baa (or BBB) have a higher default risk and are called ________. A) investment grade; lower grade B) investment grade; junk bonds C) high quality; lower grade D) high quality; […]
Date: September 10th, 2020
