In the European Monetary Union, the supply of euros A) is managed by the individual central banks of the member countries. B) is managed by the European Central Bank. C) is determined by market forces. D) automatically varied in response to short-run fluctuations in the exchange rates of the member nations. ANSWER B
Date: September 10th, 2020
In the basic two-period model, A) credit markets have frictions. B) the government borrows at a lower interest rate than do consumers. C) some consumers will always default on their debts. D) consumers do not default on their debts. ANSWER B
Date: September 10th, 2020
Financial deepening is synonymous with ________. A) issuing equities B) financial development C) borrowing additional funds from world capital markets D) holding a well diversified portfolio ANSWER B
Date: September 10th, 2020
A scatterplot allows us A) to mark peaks and troughs. B) to determine whether a series leads or lags. C) to see the comovement between two time series. D) to determine how persistent a series is. ANSWER C
Date: September 10th, 2020
Expansionary policy only leads to inflation, but does not raise output in ________. A) traditional Keynesian theory B) new Keynesian theory C) real business cycle theory D) traditional Keynesian, new Keynesian and real business cycle theory ANSWER C
Date: September 10th, 2020
The supply of euros is managed by A) the European Monetary Union. B) the European Monetary System. C) the European Central Bank. D) the European Bank for Reconstruction and Development. ANSWER C
Date: September 10th, 2020
According to Tobin’s q theory, the principal objective of investment is ________. A) to increase eligibility for the investment tax credit B) to expand production C) to increase the market value of the firm D) to lower the replacement cost of installed capital ANSWER C
Date: September 10th, 2020
Shifts of the ________ curves result from autonomous monetary policy. A) MP, IS, & AD B) MP & IS, but not AD C) IS & AD, but not MP D) MP, but not IS nor AD E) none of the above ANSWER E
Date: September 10th, 2020
Evidence suggests that financial deepening is of greatest benefit to ________. A) industries that are highly dependent on external sources of funds B) family-owned enterprises C) established firms, rather than new firms D) child workers ANSWER A
Date: September 10th, 2020
A small open economy would typically enjoy a higher trade balance if, in the domestic economy, ________. A) autonomous consumption expenditures decrease B) taxes go up C) government spending decreases D) all of the above E) none of the above ANSWER D
Date: September 10th, 2020
