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Unformatted text preview: ANSWERS AT END ECONOMICS 353 L. Tesfatsion/Spring Semester 2011 EXERCISE 3: Eight Questions (8 Pts Total) DUE: Tues., February 1, 12:40pm **PLEASE NOTE: EXERCISES ARE DUE AT THE BEGINNING OF CLASS ON THE DUE DATE. LATE EXERCISES WILL NOT BE ACCEPTED AFTER DIS- CUSSION OF ANSWERS HAS BEGUN – NO EXCEPTIONS** EXERCISE INSTRUCTIONS: • (1) Please fill in your name and student ID number on Side 1 of your bubble sheet and write 353 Exercise 3 in the top margin of Side 1. • (2) Use a number 2 pencil to mark your answers on Side 1 of the bubble sheet to the multiple-choice questions Q1 through Q8 below. • (3) Each question is worth 1 point. Questions Q1 through Q5 can be answered using required course materials for Mishkin Chapter 2:Part B. Questions Q5 through Q8 on “irrational exuberance” in U.S. stock markets leading up to the 2007-2009 financial crisis can be answered using the accompanying link to an online reading. Q1 (1 point). A new incidence of BORROWING occurs whenever . A. the current owner of a financial asset sells this asset to someone else. B. a newly issued security is purchased by a party different from the issuer. C. a household receives funds from a bank under the terms of a new residential mortgage contract D. all of the above E. only B and C above Q2 (1 Point). An example of DIRECT FINANCE is ....
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- Spring '11