货银期末习题课习题

1)If the liquidity effect is larger than the other effects, an increase in money growth will

(a)lower interest rates.

(b)raise interest rates.

(c)cause interest rates to rise initially but then fall below the initial level.

(d)cause interest rates to fall initially but then rise above the initial level.

Answer: A

2)Deposit insurance

(a)attracts risk-prone entrepreneurs to the banking industry.

(b)encourages bank managers to take on greater risks than they otherwise would.

(c)reduces the incentives of depositors to monitor the riskiness of their banks’ asset

portfolios.

(d)does all of the above.

Answer: D

3)The formula linking the money supply to the monetary base is

(a)M＝m＋MB..

(b)M ＝m×MB.

(c)m ＝M ×MB.

(d)MB ＝M ×m.

Answer: B

4) Using the one-period valuation model, assuming a year-end dividend of $0.50, an expected sales price of $50, and a required rate of return of 10%, the current price of the stock would be

(a)$50.50.

(b)$50.00.

(c)$45.91.

(d)$45.00.

Answer: C

5) The Fed uses three policy tools to manipulate the money supply: open market operations, which affect the _____; changes in discount lending, which affect the _____ by influencing the quantity of discount loans; and changes in reserve requirements, which affect the _____.

(a)money multiplier; monetary base; monetary base

(b)monetary base; money multiplier; monetary base

(c)monetary base; monetary base; money multiplier

(d)money multiplier; money multiplier; monetary base

Answer: C

6）Disadvantages of using reserve requirements to control the money supply and interest rates include

a)their overly-powerful impact on the money supply.

b)creating potential lending problems for banks with high levels of excess reserves.

c)their overly-powerful impact on reserves and the monetary base.

d)all of the above.

Answer: A

7) If the expected return on NBC stock rises from 5 to 10 percent and the expected return on CBS stock rises from 12 to 18 percent, then the expected return of holding CBS stock _____ relative to NBC stock and the demand for CBS stock _____.

a)rises; rises

b)rises; falls

c)falls; rises

d)falls; falls

Answer: A

8）When the default risk in corporate bonds increases, other things equal, the demand curve for corporate bonds shifts to the _____ and the demand curve for Treasury bonds shifts to the _____.

e)right; right

f)right; left

g)left; left

h)left; right

Answer: D

9）If the required reserve ratio is 10 percent, currency in circulation is $400 billion, checkable deposits are $800 billion, and excess reserves total $0.8 billion, then the money supply is

a)$8000.

b)$1200.

c)$1200.8.

d)$8400.

Answer: B

10）A security that pays $52.50 in one year and $110.25 in two years, with an interest rate of

5 percent, has a present value of

a)$150.

b)$162.50.

c)$200.

d)$300.

Answer: A