The fraction of deposits banks are required to keep as reserves is called the: A) deposit requirement. B) reserve requirement. C) excess reserve requirement. D) none of the above. ANSWER B
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
Bonds with relatively high risk of default are called A) Brady bonds. B) junk bonds. C) zero coupon bonds. D) investment grade bonds. ANSWER B
Date: September 10th, 2020
________ policy involves decisions about government spending and taxation. A) Monetary B) Fiscal C) Financial D) Systemic ANSWER B
Date: September 10th, 2020
Distinguish between “a change in demand” and “a change in quantity demanded.” What are the causes of each type of change and how do we illustrate them graphically? What will be an ideal response? ANSWER A “change in demand” refers to a shift of the entire demand curve. It is caused by a change […]
Date: September 10th, 2020
