plugin-Exam_1 - Econ 302 Banking and Monetary Policy Professor Abrams 2008 Spring Name Directions Circle the letter and mark the answer sheet for the

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 4) One likely explanation for the relatively high rates of inflation experienced in many Latin American countries is the 5) Between 1950 and 1980 in the U.S., interest rates trended upward. During this same time period,