{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Economics 19900 Winter 2006

Economics 19900 Winter 2006 - Economics 19900 Winter 2006...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Economics 19900 Winter 2006 THIRD HOUR EXAMINATION Name (Please Print): ______________________________________ [40 Points Possible] Part I. Multiple Choice. Circle letter corresponding to your answer. One point each; 20 points total. 1. The Fed’s purchase of U.S. government securities will: a. increase commercial bank loans. b. be an effective anti-inflationary policy. c. decrease bank reserves. d. force the discount rate and Federal funds rate higher. e. decrease the money supply. 2. Who would generally not support (or be the least supportive) of fixed-rules policies? 3. The Quantity Theory of Money asserts that: 4. Which of the following do we not usually associate with being part of the money-creation process? 5. Suppose you cash in a Certificate of Deposit at Hyde Park Bank and convert it to a traveler’s check for your spring-break trip to Fort Lauderdale. The result of this swap would be: a. an increase in both M1 and M2. b. an increase in M1 but a decrease in M2. c. a decrease in M1 but an increase in M2. d. an increase in M1, with M2 remaining unchanged. e. an increase in M2, with M1 remaining unchanged. 6. By “double coincidence of wants” we mean or are referring to: a. one disadvantage of a barter system that the use of money overcomes. b. the unlikely simultaneous equality between investment needs by businesses and saving decisions by households. c. deposits in commercial banks equaling in timing and amount how much will be loaned out. d. other countries’ use of U.S. dollars, which complicates the Fed’s ability to control the money supply. e. the Treasury Department hoping that buyers can be found when it wants to sell bonds, or that sellers will come forth just as it wants to buy bonds.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}