Econ341-Beesley-F08-Final-with-Key -...

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Econ 341 A2 Fall 2008 Final Examination 70 MC + 30 short answers Scott Beesley 2.25 hours Name___________________________________ Student Number_________________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Every recession in the Canadian economy in the 20th century had been preceded by A) a war B) an appreciation of the dollar C) high unemployment rates D) a decline in the rate of money growth 2) Which of the following are true statements? A) The inflation rate is measured as the rate of change in the aggregate price level. B) Those countries with the highest inflation rates are also the ones with the highest money growth rates. C) The average price of goods and services in an economy is called the aggregate price level. D) All of the above are true statements. 3) The higher a security ʹ s price in the secondary market A) the more funds a firm can raise by selling securities in the secondary market. B) the more funds a firm can raise by selling securities in the primary market. C) the less funds a firm can raise by selling securities in the secondary market. D) the less funds a firm can raise by selling securities in the primary market. 4) Risk sharing is also known as A) liability transformation. B) asset discounting. C) liability discounting. D) asset transformation. 5) When an economist states that barter is impossible, she doesn ʹ t really mean that barter is impossible. Her real meaning is that A) it is impossible for barter transactions to leave parties to an exchange better off. B) barter transactions are relatively costly. C) barter is illegal. D) barter has no useful place in today ʹ s world. 6) Compared to a payment system based on cheques, an electronic funds transfer systems (EFTS) system has the advantage that A) transfers of funds are completed instantaneously. B) transfers of funds are less costly. C) legal liability is more clearly defined. D) only A and B of the above. 7) You have the choice of receiving either $500 today, or $600 in two years, or $665.50 in three years. What would you choose? you know that the interest rate is 10%. A) either $500 today or $665.50 in three years B) you choose the $500 today C) either $500 today or $600 in two years D) you choose the $600 in two years 8) If $1102.50 is the amount payable in two years for a $1000 simple loan made today, the interest rate is A) 10 percent. B) 2.5 percent. C) 5 percent. D) 20 percent. 9) Deflation causes the demand for bonds to ________, the supply of bonds to ________, and interest rates to ________. A) decrease; decrease; increase B) decrease; decrease; decrease C) increase; decrease; decrease D) decrease; increase; increase 1
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10) Interest rates increased continuously during the 1970s. The most likely explanation is A) banking failures that reduced the money supply. B) the repeated bouts of recession and expansion. C) increasing expected rates of inflation.
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This note was uploaded on 04/02/2010 for the course ECO 320 taught by Professor Beto during the Spring '10 term at Strayer.

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Econ341-Beesley-F08-Final-with-Key -...

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