The phenomenon that some consumers pay a higher interest rate when they borrow than the interest rate they receive when they lend is best described as an example of A) irrational behavior. B) a credit market imperfection. C) a vast banking conspiracy. D) the burden of public debt. ANSWER B
Date: September 10th, 2020
Which of the following might cause an upward shift of the modern Phillips curve? A) an increase in oil prices B) an increase in the price of imports C) wage agreements that include compensation for inflation D) all of the above E) none of the above ANSWER D
Date: September 10th, 2020
The principal reason(s) that so much U.S. currency is held outside the U.S is (are) ________. A) many people around the world trust the U.S. dollar more than any other currency B) banks all around the world find it convenient to hold large amounts of U.S. dollars C) U.S. citizens and corporations spend a lot […]
Date: September 10th, 2020
The practice of approving mortgages in order to sell them as mortgage-backed securities is known as ________. A) originate-to-distribute B) principal-agent engineering C) predatory lending D) a credit default swap ANSWER A
Date: September 10th, 2020
If a consumer borrows at an interest rate greater than the interest rate at which he or she can lend, then A) banks cannot make a profit. B) the budget constraint has a kink at the endowment point. C) the consumer must be a lender. D) this makes no difference for consumer behavior. ANSWER […]
Date: September 10th, 2020
An indifference curve A) connects a set of consumption bundles among which the consumer is indifferent. B) is only useful in analyzing apathetic consumers. C) connects a set of consumers who each have the same preferences. D) is only useful in microeconomics. ANSWER A
Date: September 10th, 2020
The Federal Reserve System has a network of how many Federal Reserve Banks? A) 12 B) 36 C) 50 D) 84 ANSWER A
Date: September 10th, 2020
________ will cause a movement along the modern Phillips curve. A) An increase in oil prices B) An increase in the price of imports C) Wage agreements that include compensation for inflation D) all of the above E) none of the above ANSWER E
Date: September 10th, 2020
Hedge funds, investment banks, and other non-depository financial firms are known as ________. A) the shadow banking system B) repurchasers C) subprime lenders D) CDOs ANSWER A
Date: September 10th, 2020
Recent financial turmoil has caused many people to increase saving and to prefer assets that are perceived to be relatively safe and liquid. What are the likely effects on M1 and M2? What will be an ideal response? ANSWER Increased saving implies reduced consumption, so holding of the most liquid assets, M1, should decline. […]
Date: September 10th, 2020
