The liquidity preference function shows that as ________. A) real income decreases, so does the demand for real money balances B) the nominal interest rate increases, so does the demand for real money balances C) real income decreases, so does the real interest rate D) all of the above E) none of the above […]
Date: September 10th, 2020
The federal government of the United States has ________. A) proven itself unable to significantly influence U.S. home ownership B) has been able to increase the volume of home ownership in the U.S. C) proven itself able to effectively control monetary policy D) has been unable to increase the volume of government spending since WWII […]
Date: September 10th, 2020
In a large open economy ________. A) the effect of shifts in saving and investment on the trade balance are in the same direction as in a closed economy B) the effect of shifts in saving and investment on net capital flows are in the same direction as in a closed economy C) the effect […]
Date: September 10th, 2020
The policy ineffectiveness proposition of the new classical model suggests that ________. A) unanticipated policy has no effect on the business cycle B) anticipated policy can have an effect on the business cycle C) anticipated policy has no effect on the business cycle D) legislative policy initiatives have little effect if the executive branch of […]
Date: September 10th, 2020
A positive relationship between the rate of change in money prices and real GDP is A) a leading relationship B) a lagging relationship. C) an example of countercyclicality. D) a Phillips curve. ANSWER D
Date: September 10th, 2020
Under a flexible exchange rate, an increase in the domestic money supply leads to A) a devaluation of the domestic currency. B) a revaluation of the domestic currency. C) a depreciation of the domestic currency. D) an appreciation of the domestic currency. ANSWER C
Date: September 10th, 2020
The provision of funds to the mortgage market through the purchase of mortgage-backed securities and mortgages is performed by ________. A) Fannie Mae and Freddie Mac B) the Federal Housing Administration C) the Federal Reserve System D) subprime borrowers ANSWER A
Date: September 10th, 2020
Demand for real money balances depends on ________. A) the price level B) the real interest rate C) the opportunity cost of holding money D) all of the above E) none of the above ANSWER C
Date: September 10th, 2020
The risk that a borrower has more information about their previous behavior than a potential lender is known as the ________. A) moral hazard problem B) adverse selection problem C) time-space discontinuity D) tertiary behavior problem ANSWER B
Date: September 10th, 2020
The federal government has encouraged home ownership through ________. A) an increase in home prices B) an increase in domestic interest rates C) a decrease in the implicit rent on residential housing D) allowing mortgage interest to be tax deductible ANSWER D
Date: September 10th, 2020
