There is a ________ association between inflation and the growth rate of money ________.A) positive; demandB) positive; supplyC) negative; demandD) negative; supply Everything else held constant, a stronger dollar benefits ______ and hurts ________.A) American businesses; American consumersB) American businesses; foreign businessesC) American consumers; American businessesD) foreign businesses; American consumers Financial markets have the basic function ofA) getting people with funds to lend together with people who want to borrow funds.B) assuring that the swings in the business cycle are less pronounced.C) assuring that governments need never resort to printing money.D) providing a risk-free repository of spending power. Which of the following can be described as involving indirect finance?A) You make a loan to your neighbor.B) You buy shares in a mutual fund.C) You buy a U.S. Treasury bill from the U.S. Treasury at Treasury Direct.gov.D) You purchase shares in an initial public offering by a corporation in the primary market.Securities are ________ for the person who buys them, but are ________ for the individual or firm that issues them.A) assets; liabilitiesB) liabilities; assetsC) negotiable; nonnegotiableD) nonnegotiable; negotiable A financial market in which only short-term debt instruments are traded is called the ________ market.A) bondB) moneyC) capitalD) stock An example of economies of scale in the provision of financial services isA) investing in a diversified collection of assets.B) providing depositors with a variety of savings certificates.C) hiring more support staff so that customers don't have to wait so long for assistance.D) spreading the cost of writing a standardized contract over many borrowers. Which of the following is NOT a secondary market?A) foreign exchange marketB) futures marketC) options marketD) IPO market Typically, borrowers have superior information relative to lenders about the potential returns and risks associated with an investment project. The difference in information is calledA) moral selection.B) risk sharing.C) asymmetric information.D) adverse hazard. The monetary base minus reserves equalsA) currency in circulation.B) the borrowed base.C) the non borrowed base.D) discount loans. Assume excess reserves = R2 million; the excess ratio : required reserves = 2:1; Calculate the total reserves; reserve requirement, and total deposits.A) R1mil, 10%, R10milB) R1mil, 10%, R5milC) R3mil, 5%, R20milD) R3mil, 5%, R10mil Everything else held constant, a decrease in the required reserve ratio on checkable deposits will meanA) a decrease in the money supply.B) an increase in the money supply.C) a decrease in checkable deposits.D) an increase in discount loans. Assuming initially that the required reserve ratio = 15%, the currency-deposit ratio = 40%, and the excess reserve ratio = 5%, an increase in the excess reserve ratio to 10% causes the money multiplier to ________, everything else held constant.A) increase from 2.15 to 2.33B) decrease from 2.33 to 2.15C) increase from 1.54 to 1.67D) decrease from 1.67 to 1.54 If a bank has excess reserves of R4,000 and demand deposit liabilities of R100,000, and if the reserve requirement is 15 percent, then the bank has actual reserves ofA) R17,000.B) R19,000.C) R24,000.D) R29,000. The percentage of deposits that banks must hold in reserve is theA) excess reserve ratio.B) required reserve ratio.C) total reserve ratio.D) currency ratio.

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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There is a ________ association between inflation and the growth rate of money ________.
A) positive; demand
B) positive; supply
C) negative; demand
D) negative; supply

Everything else held constant, a stronger dollar benefits ______ and hurts ________.
A) American businesses; American consumers
B) American businesses; foreign businesses
C) American consumers; American businesses
D) foreign businesses; American consumers

Financial markets have the basic function of
A) getting people with funds to lend together with people who want to borrow funds.
B) assuring that the swings in the business cycle are less pronounced.
C) assuring that governments need never resort to printing money.
D) providing a risk-free repository of spending power.

Which of the following can be described as involving indirect finance?
A) You make a loan to your neighbor.
B) You buy shares in a mutual fund.
C) You buy a U.S. Treasury bill from the U.S. Treasury at Treasury Direct.gov.
D) You purchase shares in an initial public offering by a corporation in the primary market.
Securities are ________ for the person who buys them, but are ________ for the individual or firm that issues them.
A) assets; liabilities
B) liabilities; assets
C) negotiable; nonnegotiable
D) nonnegotiable; negotiable

A financial market in which only short-term debt instruments are traded is called the ________ market.
A) bond
B) money
C) capital
D) stock

An example of economies of scale in the provision of financial services is
A) investing in a diversified collection of assets.
B) providing depositors with a variety of savings certificates.
C) hiring more support staff so that customers don't have to wait so long for assistance.
D) spreading the cost of writing a standardized contract over many borrowers.

Which of the following is NOT a secondary market?
A) foreign exchange market
B) futures market
C) options market
D) IPO market

Typically, borrowers have superior information relative to lenders about the potential returns and risks associated with an investment project. The difference in information is called
A) moral selection.
B) risk sharing.
C) asymmetric information.
D) adverse hazard.

The monetary base minus reserves equals
A) currency in circulation.
B) the borrowed base.
C) the non borrowed base.
D) discount loans.

Assume excess reserves = R2 million; the excess ratio : required reserves = 2:1; Calculate the total reserves; reserve requirement, and total deposits.
A) R1mil, 10%, R10mil
B) R1mil, 10%, R5mil
C) R3mil, 5%, R20mil
D) R3mil, 5%, R10mil

Everything else held constant, a decrease in the required reserve ratio on checkable deposits will mean
A) a decrease in the money supply.
B) an increase in the money supply.
C) a decrease in checkable deposits.
D) an increase in discount loans.

Assuming initially that the required reserve ratio = 15%, the currency-deposit ratio = 40%, and the excess reserve ratio = 5%, an increase in the excess reserve ratio to 10% causes the money multiplier to ________, everything else held constant.
A) increase from 2.15 to 2.33
B) decrease from 2.33 to 2.15
C) increase from 1.54 to 1.67
D) decrease from 1.67 to 1.54

If a bank has excess reserves of R4,000 and demand deposit liabilities of R100,000, and if the reserve requirement is 15 percent, then the bank has actual reserves of
A) R17,000.
B) R19,000.
C) R24,000.
D) R29,000.

The percentage of deposits that banks must hold in reserve is the
A) excess reserve ratio.
B) required reserve ratio.
C) total reserve ratio.
D) currency ratio.

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There is a ________ association between inflation and the growth rate of money ________. A) positive; demand B) positive; supply C) negative; demand D) negative; supply

There is a association between inflation and the growth rate of money . A) positive; demand B) positive; supply C) negative; demand D) negative; supply