An increase in inflation leads to higher ________. A) output B) spending C) real interest rate D) all of the above E) none of the above ANSWER C
Date: September 10th, 2020
When is a firm more likely to engage in excessively risky behaviors, when business is well, or when it is facing financial distress? What will be an ideal response? ANSWER Financial distress is a cause of moral hazard. Even heretofore prudent managers are tempted to take drastic action with the hope that a big […]
Date: September 10th, 2020
A rise in stock prices leads to ________. A) an increase in income B) an increase in Tobin’s q C) a decrease in Tobin’s q D) a decrease in income ANSWER B
Date: September 10th, 2020
If deviations from trend in a macroeconomic variable are positively correlated with deviations from trend in real GDP, that variable is said to be A) useful in predicting future movements in real GDP. B) procyclical. C) countercyclical. D) acyclical. ANSWER B
Date: September 10th, 2020
Which of the following is a way to obtain endogenous growth: A) inflation. B) human capital accumulation. C) physical capital accumulation. D) population growth. ANSWER B
Date: September 10th, 2020
If the correlation between GDP and y is 0.55, we say y is A) procyclical. B) acyclical. C) countercyclical. D) tricyclical. ANSWER A
Date: September 10th, 2020
A devaluation of the exchange rate is a policy action that A) increases the real exchange rate. B) decreases the real exchange rate. C) increases the nominal exchange rate. D) decreases the nominal exchange rate. ANSWER C
Date: September 10th, 2020
Which of the following would lead domestic investment to rise? A) an increase in government spending throughout the world B) an increase in world taxes C) an increase in world autonomous consumption D) all of the above E) none of the above ANSWER B
Date: September 10th, 2020
Endogenous growth theory is about A) welfare of indigenous people. B) explaining growth. C) studying education. D) studying fertility choices. ANSWER B
Date: September 10th, 2020
Prudential supervision is, in essence, the monitoring of ________. A) borrowers, to enforce restrictive covenants B) intermediaries, to direct credit to preferred sectors of the economy C) holders of an insurance policy, to discourage excessively risky behaviors D) depositors, to discourage sudden withdrawal of funds ANSWER C
Date: September 10th, 2020
