Sample Mid-Term Two

Sample Mid-Term Two - Sample Mid-Term Two(Time Limit...

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Sample Mid-Term Two (Time Limit – Strictly 1 hour and 20 minutes) Please note that this mid-term has questions on material that will be covered on Thursday February 15, 2007. Please only attempt the sample mid-term after we are done with Thursday’s class. This test has 20 multiple choice questions (20 points) and 7 short answer questions (30 points) for a total of 50 points. Multiple Choice Section (20 questions for 1 point each): Answer all questions. 1. The type of currency in circulation in the modern U.S. economy is almost entirely a. commodity money. b. metallic money. c. fiat money. d. money that has intrinsic value. 2. Marios buys Honeywell stock at an initial public offering. a. The stock is being sold on the secondary market. b. Honeywell is divesting away ownership to Marios. c. The stock represents a high risk investment for Marios. d. The stock represents a low risk savings option for Marios. 3. Your company has a project that will provide $1,000 of revenue immediately and $2,000 of revenue one year from today. The present value of this project is a. $3,000. b. $1,000 + $2,000/(1 + r). c. $1,000/(1 + r) + $2,000/(1 + r)². d. None of the above are correct. Table 27-2 Use the balance sheet for the following question. Last Bank of Hope Assets Liabilities Reserves $2,500 Deposits $10,000 Loans $7,500 4. Refer to Table 27-2. If the reserve requirement is 10 percent, this bank a. is holding excess reserves of $1,000. b. is in a position to make a new loan of $1,500. c. has total reserves of $10,000. d. has less reserves than required. 5. The primary feature of money is that it serves as a. barter value. b. a medium of exchange. c. intrinsic value. d. commodity value. 1
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6. The Federal Open Market Committee has a. Seven members of whom five are presidents of federal reserve district banks. b. Twelve members of whom seven are presidents of federal reserve district banks. c.
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This note was uploaded on 05/05/2008 for the course ECON 201 taught by Professor Witte during the Winter '08 term at Northwestern.

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Sample Mid-Term Two - Sample Mid-Term Two(Time Limit...

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