plugin-Exam_1 - Econ 302 Banking and Monetary Policy...

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Econ 302 Name ____________________________________________ Banking and Monetary Policy Professor Abrams 2008 Spring Directions: Circle the letter and mark the answer sheet for the best answer t o each of the following 40 questions. The test will be returned to you. Please mark both the test and the answer sheet. Good Luck. MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Channeling funds from individuals with surplus funds to those desiring funds when the saver does not purchase the borrower's security is known as A) redistribution. B) financial intermediation. C) barter. D) taxation. 2) Evidence from the United States and other foreign countries indicates that A) there is a strong positive association between inflation and growth rate of money over long periods of time. B) countries with low monetary growth rates tend to experience higher rates of inflation, all else being constant. C) there is little support for the assertion that "inflation is always and everywhere a monetary phenomenon." D) money growth is clearly unrelated to inflation. 3) Evidence from business cycle fluctuations in the United States indicates that A) recessions have been preceded by declines in share prices on the stock exchange. B) a negative relationship between money growth and general economic activity exists. C) recessions have been preceded by a decline in the growth rate of money. D) recessions have been preceded by dollar depreciation. 4) One likely explanation for the relatively high rates of inflation experienced in many Latin American countries is the A) relatively slow growth in the money supply in these countries. B) budget surpluses maintained in these countries. C) decline in the prices of basic commodities in these countries. D) relatively rapid growth in the money supply in these countries. 5) Between 1950 and 1980 in the U.S., interest rates trended upward. During this same time period, A) the rate of money growth declined. B) the aggregate price level declined quite dramatically. C) the government budget deficit (expressed as a percentage of GNP) trended downward. D) the rate of money growth increased. 6) If the price level increases from 200 in year 1 to 220 in year 2, the rate of inflation from year 1 to year 2 is A) 11%. B) 20%. C) 10%. D) 120%. 1
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7) Which of the following can be described as involving indirect finance? A) You buy shares in a mutual fund. B) You make a loan to your neighbor.
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This note was uploaded on 12/12/2010 for the course ECON ECON302 taught by Professor Abrams during the Fall '10 term at University of Delaware.

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plugin-Exam_1 - Econ 302 Banking and Monetary Policy...

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