Which of the following is true with regard to the supply of money? A) an open market sale of government securities will increase liquidity B) an open market purchase of government securities will decrease liquidity C) liquidity and the money supply are directly related D) all of the above E) none of the above […]
Date: September 10th, 2020
In the monetary small open-economy model, a flexible exchange rate insulates the domestic price level from A) both real and nominal shocks from abroad. B) real shocks from abroad, but not from nominal shocks from abroad. C) nominal shocks from abroad, but not from real shocks from abroad. D) neither real nor nominal shocks from […]
Date: September 10th, 2020
The phrase “double coincidence of wants” ________. A) is useful to explain why barter is an efficient practice B) refers to two people who have similar tastes C) suggests a quite improbable circumstance D) clarifies the distinction between income and wealth E) none of the above ANSWER C
Date: September 10th, 2020
A permanent decrease in taxes leads to A) a small increase in current consumption. B) a large increase in current consumption. C) a small decrease in future consumption. D) a large decrease in future consumption. ANSWER B
Date: September 10th, 2020
A rapid increase in the availability of credit to previously underserved borrowers is likely ________. A) to result from financial liberalization B) to improve the allocation of capital C) to confirm the merits of microcredit D) to result from deleveraging ANSWER A
Date: September 10th, 2020
A natural region over which a single currency dominates as a medium of exchange is called A) sovereign nation. B) monetary union area. C) common currency area. D) currency union. ANSWER C
Date: September 10th, 2020
A temporary decrease in taxes leads to A) a small increase in current consumption. B) a large increase in current consumption. C) a small decrease in future consumption. D) a large decrease in future consumption. ANSWER A
Date: September 10th, 2020
A likely consequence of deposit insurance, ceteris paribus, is ________. A) an increase in risk-taking by banks B) a bank panic C) a credit boom D) a reduction in the severity of adverse selection ANSWER A
Date: September 10th, 2020
The most liquid asset is ________. A) stocks B) bonds C) cash D) real estate E) none of the above ANSWER C
Date: September 10th, 2020
Typically, central banks increase the supply of money by ________. A) buying bonds from banks B) printing currency C) directing the government to issue more money to banks D) all of the above E) none of the above ANSWER A
Date: September 10th, 2020
