货币银行学(A卷)答案

江西财经大学09－10学年第二学期期末考试参考答案与评分标准试卷代码： 12423A 授课课时：48课程名称：货币银行学适用对象：国际学院学生试卷命题人李静试卷审核人王耀德Part I. This part has 20 Multiple Choice Questions and each one is worth 1 points. The total points for this part are 20 points. Please choose only one answer for each question.1)Money supply models tend to focus on the monetary base rather than on reserves since(a)Fed actions have no effect on reserves but have a predictable effect on the monetary base.(b)Fed actions in general have little effect on reserves but have a predictable effect on the monetarybase.(c)Fed actions have a more predictable effect on the monetary base.(d)none of the above.Answer: CQuestion Status: Previous Edition2)The price of a futures contract at the expiration date of the contract(a)equals the price of the underlying asset.(b)equals the price of the counterparty.(c)equals the hedge position.(d)equals the value of the hedged asset.Answer: AQuestion Status: Study Guide3)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: AQuestion Status: Previous Edition4)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: DQuestion Status: Previous Edition5)The _____ are the costs associated with deposit outflows, the _____ excess reserves banks will want tohold.(a)lower; more(b)higher; less(c)higher; more(d)None of the above, since deposit outflows cannot be anticipated.Answer: CQuestion Status: Previous Edition6)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: BQuestion Status: New7)If interest rates are expected to fall in the future, the demand for long-term bonds today _____ andthe demand curve shifts to the _____.(a)rises; right(b)rises; left(c)falls; right(d)falls; leftAnswer: AQuestion Status: Previous Edition8)Money is defined as(a)bills of exchange.(b)anything that is generally accepted in payment for goods and services or in the repayment ofdebt.(c)a risk-free repository of spending power.(d)the unrecognized liability of governments.Answer: BQuestion Status: Previous Edition9)Federal reserve assets include(a)government securities.(b)bank reserves.(c)currency in circulation.(d)all of the above.Answer: AQuestion Status: New10) 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: CQuestion Status: New11) If wealth decreases, the demand for common stocks _____ and that of long-term bonds_____.(a)increases; increases(b)increases; decreases(c)decreases; decreases(d)decreases; increasesAnswer: CQuestion Status: Previous Edition12)The Fed uses three policy tools to manipulate the money supply: open market operations, which affectthe _____; 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 baseAnswer: CQuestion Status: Revised13)Which of the following statements are true?a)A bank’s assets are its sources of funds.b)A bank’s liabilities are its uses of funds.c)A bank’s balance sheet shows that total assets equal total liabilities plus equity capital.d)Each of the above.Answer: CQuestion Status: Previous Edition14)The objectives of the Federal Reserve in its conduct of monetary policy includea)economic growth.b)price stability.c)high employment.d)all of the above.Answer: DQuestion Status: Previous Edition15)Which of the following is not one of the eight basic puzzles about financial structure?a)The financial system is among the most heavily regulated sectors of the economy.b)Issuing marketable securities is the primary way businesses finance their operations.c)Indirect finance, which involves the activities of financial intermediaries, is many times moreimportant than direct finance, in which businesses raise funds directly from lenders in financial markets.d)Banks are the most important source of external funds to finance businesses.Answer: BQuestion Status: Previous Edition16)Because it is a medium of exchange, moneya）discourages specialization and the division of labor.b) reduces transaction costs.c)is not allowed to earn interest.d)does only (b) and (c) of the above.Answer: BQuestion Status: Previous Edition17)Which of the following long-term bonds currently has the lowest interest rate?a)Corporate Aaa bondsb)U.S. Treasury bondsc)Corporate Aa bondsd)Corporate Baa bondsAnswer: BQuestion Status: Previous Edition18)Holding the expected return on bonds constant, an increase in the expected return on common stockswould _____ the demand for bonds, shifting the demand curve to the _____.a)decrease; leftb)decrease; rightc)increase; leftd)increase; rightAnswer: AQuestion Status: Previous Edition19)If a security pays $110 next year and $121 the year after that, what is its yield to maturity if it sellsfor $200?a)9 percentb)10 percentc)11 percentd)12 percentAnswer: BQuestion Status: Previous Edition20)Disadvantages of using reserve requirements to control the money supply and interest rates includea)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: AQuestion Status: Previous EditionPartⅡ. This part has 10 True of False Questions and each one is worth 1 points. The total points for this part are 10 points.1 If reserve requirement were elimininated, it would be harder to control interest rates.Answer: False2 The basic activity of banks is to accept deposits and make loans.Answer: True3 As a medium of exchange is what distinguishes money from other assets.Answer: True4 When the coupon bond is priced at its face value, the yield to maturity equals the coupon rate. Answer: True5 If bonds of different maturities are close substitutes, their interest rates are more likely to move together.Answer: True6 An efficient market is one in which no one ever profits from having better information than the rest. Answer: False7 The income effect of an increase in the money supply is a decrease in interest rates in response to the higher level of income.Answer: False8 Stocks are not the most important source of external financial for businesses.Answer: True9 A bank maintains bank capital to lessen the chance that it will become insolvent.Answer: True10 If the demand for money did not fluctuate, the Fed could pursue both a money supply target and an interest-rate target at the same time.Answer: TruePartⅢ. This part has 4 Key Terms Questions and each one is worth 2.5 points. The total points for this part are 10 points. Please explain briefly for each key term.1 Discount windowAnswer: The Federal Reserve facility at which discount loans are made to banks is callled the discount window. (P.400)2 Money MultiplierAnswer: A ratio that relates the change in the money supply to a given change in the monetarybase.( p.374)3 Term structure of interest ratesAnswer: A bond’s term to maturity affects its interest rate, and the relationship among interest rates on bonds with different terms to maturity is called the term structure of interest rates. ( p.120)4 LiquidityAnswer: The relative ease and speed with which an asset can be converted into a medium of exchange. ( p.86)PartⅣ. This part has 5 Essay Questions and each one is worth 12 points. The total points for this part are 60 points. ( Please write down your answers as clearly as possible. If I can’t read your hand-writing, I never assume your answers are right )1Explain the complete formula for the money supply, and explain how changes in required reserves, excess reserves, the currency ratio, the nonborrowed base, and discount borrowing affect the money supply.Answer: The formula isM＝1＋c×(MB n＋DL) r＋e＋cThe formula indicates that the money supply is the product of the multiplier times thebase. Increases in any of the multiplier components, required reserves, r; excess reserves,e; or the currency ratio, c, reduce the multiplier and the money supply. Increases in thenonborrowed base and discount borrowing both increase the base and the money supply.2 Why has the development of overnight loan markets made it more likely that banks will hold fewer excess reserves?Answer: Because when a deposit outflow occurs, a bank is able to borrow reserves in these overnight loan markets quickly; thus, it does not need to acquire reserves at a high cost by calling in or selling off loans. The presence of overnight loan markets thus reduces the costs associated with deposit outflows, so banks will hold fewer excess reserves.3Assume that no banks hold excess reserves, and the public holds no currency. If a bank sells a $100 security to the Fed, show, using T-accounts, what happens to this bank and two additional steps in the deposit expansion process, assuming a 10% reserve requirement. How much do deposits andloans increase for the banking system when the process is completed?Answer: The bank first changes a security for reserves, and then lends the reserves, creating loans.Step 1Bank AStep 2Bank AAssets LiabilitiesNext, the proceeds are deposited in Bank B, and then Bank B lends it $90 of excessreserves.Step 3Bank BAssets LiabilitiesStep 4Bank BNext, the loan proceeds are deposited in Bank C, which then lends its excess reservesStep 5Bank CStep 6Bank CFor the banking system, both loans and deposits increase by $1000.4During President Reagan’s administration, his supporters argued that higher real interest rates were the result of policies increasing the profitability of investment. Reagan’s critics argued that the high interest rates were the result of high budget deficits. Demonstrate graphically and explain howincreased profitability of investments and increased deficits affect bond prices and interest rates.Based on your graphs, is there merit to either viewpoint?Answer: As increased deficits and increased profitability of investment both increase the supply of bonds, one graph showing this shift and the resulting fall in prices and increase in interestrates is appropriate. As the graphical analysis cannot distinguish between the alternatives,answers will indicate that both views have merit.5If over the next five years, the interest rates on 1-year bonds are expected to be 5, 7, 7, 6, and 5percent, and the liquidity premium for five-year bonds is 1 percent. According to the expectations theory of the term structure, what is the rate on five-year bonds? According to the liquidity premium theory, what is the rate on five-year bonds? Explain the difference between the two answers. Answer: The expectations theory predicts that the five-year interest rate is the average of five 1-year interest rates, which is 6 percent in this problem. The liquidity premium theory addsa term premium due to a preference for short-term bonds to the expectations theory. In thisproblem, the liquidity premium theory predicts a rate of 7 percent.。