Question 1

It is true that inflation is a

Accepted Answer

A) continuous increase in the money supply. 
B) continuous fall in prices. 
C) decline in interest rates. 
D) continually rising price level. 
A) continuous increase in the money supply. 
B) continuous fall in prices. 
C) decline in interest rates. 
D) continually rising price level.

Question 2

High interest rates might ________ purchasing a house or car but at the same time high interest rates might ________ saving.

Accepted Answer

A) discourage;encourage 
B) discourage;discourage 
C) encourage;encourage 
D) encourage;discourage 
A) discourage;encourage 
B) discourage;discourage 
C) encourage;encourage 
D) encourage;discourage

Question 3

When a budget deficit occurs in the United States,the U.S.Treasury finances this deficit by

Accepted Answer

A) borrowing. 
B) imposing a moratorium of new government spending. 
C) increasing the tax rate. 
D) printing more dollars. 
A) borrowing. 
B) imposing a moratorium of new government spending. 
C) increasing the tax rate. 
D) printing more dollars.

Question 4

The stock market is

Accepted Answer

A) where interest rates are determined. 
B) the most widely followed financial market in the United States. 
C) where foreign exchange rates are determined. 
D) the market where most borrowers get their funds. 
A) where interest rates are determined. 
B) the most widely followed financial market in the United States. 
C) where foreign exchange rates are determined. 
D) the market where most borrowers get their funds.

Question 5

If nominal GDP in 2001 is $9 trillion,and 2001 real GDP in 1996 prices is $6 trillion,the GDP deflator price index is

Accepted Answer

A) 7. 
B) 100. 
C) 150. 
D) 200. 
A) 7. 
B) 100. 
C) 150. 
D) 200.

Question 6

From 1980-1985,the dollar strengthened in value against other currencies.Who was helped and who was hurt by this strong dollar?

Accepted Answer

American consumers benefitted because im

Question 7

Evidence from business cycle fluctuations in the United States indicates that

Accepted Answer

A) a negative relationship between money growth and general economic activity exists. 
B) recessions are usually preceded by declines in bond prices. 
C) recessions are usually preceded by dollar depreciation. 
D) recessions are usually preceded by a decline in the growth rate of money. 
A) a negative relationship between money growth and general economic activity exists. 
B) recessions are usually preceded by declines in bond prices. 
C) recessions are usually preceded by dollar depreciation. 
D) recessions are usually preceded by a decline in the growth rate of money.

Question 8

A financial crisis is

Accepted Answer

A) not possible in the modern financial environment. 
B) a major disruption in the financial markets. 
C) a feature of developing economies only. 
D) typically followed by an economic boom. 
A) not possible in the modern financial environment. 
B) a major disruption in the financial markets. 
C) a feature of developing economies only. 
D) typically followed by an economic boom.

Question 9

Everything else held constant,an increase in interest rates on student loans

Accepted Answer

A) increases the cost of a college education. 
B) reduces the cost of a college education. 
C) has no effect on educational costs. 
D) increases costs for students with no loans. 
A) increases the cost of a college education. 
B) reduces the cost of a college education. 
C) has no effect on educational costs. 
D) increases costs for students with no loans.

Question 10

What is a stock? How do stocks affect the economy?

Accepted Answer

A stock represents a share of ownership

Question 11

The financial intermediaries that the average person interacts with most frequently are

Accepted Answer

A) exchanges. 
B) over-the-counter markets. 
C) finance companies. 
D) banks. 
A) exchanges. 
B) over-the-counter markets. 
C) finance companies. 
D) banks.

Question 12

Evidence from the United States and other foreign countries indicates that

Accepted Answer

A) there is a strong positive association between inflation and growth rate of money over long periods of time. 
B) there is little support for the assertion that "inflation is always and everywhere a monetary phenomenon." 
C) countries with low monetary growth rates tend to experience higher rates of inflation,all else being constant. 
D) money growth is clearly unrelated to inflation. 
A) there is a strong positive association between inflation and growth rate of money over long periods of time. 
B) there is little support for the assertion that "inflation is always and everywhere a monetary phenomenon." 
C) countries with low monetary growth rates tend to experience higher rates of inflation,all else being constant. 
D) money growth is clearly unrelated to inflation.

Question 13

If an economy has aggregate output of $20 trillion,then aggregate income is

Accepted Answer

A) $10 trillion. 
B) $20 trillion. 
C) $30 trillion. 
D) $40 trillion. 
A) $10 trillion. 
B) $20 trillion. 
C) $30 trillion. 
D) $40 trillion.

Question 14

An increase in stock prices ________ the size of people's wealth and may ________ their willingness to spend,everything else held constant.

Accepted Answer

A) increases;increase 
B) increases;decrease 
C) decreases;increase 
D) decreases;decrease 
A) increases;increase 
B) increases;decrease 
C) decreases;increase 
D) decreases;decrease

Question 15

Everything else held constant,Americans who love French wine benefit most from

Accepted Answer

A) a decrease in the dollar price of euros. 
B) an increase in the dollar price of euros. 
C) a constant dollar price for euros. 
D) a ban on imports from Europe. 
A) a decrease in the dollar price of euros. 
B) an increase in the dollar price of euros. 
C) a constant dollar price for euros. 
D) a ban on imports from Europe.

Question 16

Nominal GDP is output measured in ________ prices while real GDP is output measured in ________ prices.

Accepted Answer

A) current;current 
B) current;fixed 
C) fixed;fixed 
D) fixed;current 
A) current;current 
B) current;fixed 
C) fixed;fixed 
D) fixed;current

Question 17

From 1950-2014 the price level in the United States increased more than

Accepted Answer

A) twofold. 
B) threefold. 
C) sixfold. 
D) tenfold. 
A) twofold. 
B) threefold. 
C) sixfold. 
D) tenfold.

Question 18

Everything else held constant,a weaker dollar will likely hurt

Accepted Answer

A) textile exporters in South Carolina. 
B) wheat farmers in Montana that sell domestically. 
C) automobile manufacturers in Michigan that use domestically produced inputs. 
D) furniture importers in California. 
A) textile exporters in South Carolina. 
B) wheat farmers in Montana that sell domestically. 
C) automobile manufacturers in Michigan that use domestically produced inputs. 
D) furniture importers in California.

Question 19

Which of the following is a TRUE statement?

Accepted Answer

A) Money or the money supply is defined as Federal Reserve notes. 
B) The average price of goods and services in an economy is called the aggregate price level. 
C) The inflation rate is measured as the rate of change in the federal government budget deficit. 
D) The aggregate price level is measured as the rate of change in the inflation rate. 
A) Money or the money supply is defined as Federal Reserve notes. 
B) The average price of goods and services in an economy is called the aggregate price level. 
C) The inflation rate is measured as the rate of change in the federal government budget deficit. 
D) The aggregate price level is measured as the rate of change in the inflation rate.

Question 20

If the CPI is 120 in 1996 and 180 in 2002,then between 1996 and 2002,prices have increased by

Accepted Answer

A) 180%. 
B) 80%. 
C) 60%. 
D) 50%. 
A) 180%. 
B) 80%. 
C) 60%. 
D) 50%.

Exam 1: Why Study Money, banking, and Financial Markets

It is true that inflation is a

High interest rates might ________ purchasing a house or car but at the same time high interest rates might ________ saving.

When a budget deficit occurs in the United States,the U.S.Treasury finances this deficit by

The stock market is

If nominal GDP in 2001 is $9 trillion,and 2001 real GDP in 1996 prices is $6 trillion,the GDP deflator price index is

From 1980-1985,the dollar strengthened in value against other currencies.Who was helped and who was hurt by this strong dollar?

Evidence from business cycle fluctuations in the United States indicates that

A financial crisis is

Everything else held constant,an increase in interest rates on student loans

What is a stock? How do stocks affect the economy?

The financial intermediaries that the average person interacts with most frequently are

Evidence from the United States and other foreign countries indicates that

If an economy has aggregate output of $20 trillion,then aggregate income is

An increase in stock prices ________ the size of people's wealth and may ________ their willingness to spend,everything else held constant.

Everything else held constant,Americans who love French wine benefit most from

Nominal GDP is output measured in ________ prices while real GDP is output measured in ________ prices.

From 1950-2014 the price level in the United States increased more than

Everything else held constant,a weaker dollar will likely hurt

Which of the following is a TRUE statement?

If the CPI is 120 in 1996 and 180 in 2002,then between 1996 and 2002,prices have increased by

An Overview of the Financial System

What Is Money

The Meaning of Interest Rates

The Behavior of Interest Rates

The Risk and Term Structure of Interest Rates

The Stock Market, the Theory of Rational Expectations, and the Efficient Market Hypothesis

An Economic Analysis of Financial Structure

Banking and the Management of Financial Institutions

Economic Analysis of Financial Regulation

Banking Industry: Structure and Competition

Financial Crises

Central Banks and the Federal Reserve System

The Money Supply Process

Tools of Monetary Policy

The Conduct of Monetary Policy: Strategy and Tactics

The Foreign Exchange Market

The International Financial System

Quantity Theory, inflation, and the Demand for Money

The Is Curve

The Monetary Policy and Aggregate Demand Curves

Aggregate Demand and Supply Analysis

Monetary Policy Theory

The Role of Expectations in Monetary Policy

Transmission Mechanisms of Monetary Policy

Web 1:financial Crises in Emerging Market Economies

Web 2:the Islm Model

Web 3:nonbank Finance

Web 4:financial Derivatives

Web 5:conflicts of Interest in the Financial Services Industry

Filters

High interest rates might purchasing a house or car but at the same time high interest rates might saving.

An increase in stock prices the size of people's wealth and may their willingness to spend,everything else held constant.

Nominal GDP is output measured in prices while real GDP is output measured in prices.