B appreciate in the long run C depreciate in the short run D appreciate in the

B appreciate in the long run c depreciate in the

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B) appreciate in the long run. C) depreciate in the short run. D) appreciate in the short run. 45) Which o± the ±ollowing $1,000 ±ace-value securities has the highest yield to maturity? A) A 5 percent coupon bond selling ±or $1,000 B) A 12 percent coupon bond selling ±or $1,000 C) A 12 percent coupon bond selling ±or $1,100 D) A 10 percent coupon bond selling ±or $1,000 46) When the ±ederal ±unds rate equals the discount rate
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A) the demand curve for reserves is vertical. B) the supply curve of reserves is horizontal. C) the demand curve for reserves is horizontal. D) the supply curve of reserves is vertical. 47) The main argument in favor of Fed independence is that A) the Constitution requires it. B) congressional control of the Fed was tried during the 1960s and did not work well. C) interest rates would probably be lower if Congress controlled the Fed; thus hurting savers. D) monetary policy is too important and too technical to be determined in the political arena. 48) A sale of foreign assets by a central bank has the same e±ect on the monetary base as A) an open market sale of government bonds. B) a decrease in the discount rate. C) an open market purchase of government bonds. D) a decrease in the required reserve ratio. 49) Commodity money can best be described as A) money used to purchase agricultural products B) a good used as money that also has value independent of its use as money C) the form of money used in a barter system D) standardized goods like gold that trade in a ²nancial market
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50) The Glass-Steagall Act was designed to A) promote the interests of community banks. B) promote mergers in the banking industry. C) legally separate investment banking from commercial banking. D) impose high capital ratios on investment banks. 51) Which of the following is an example of adverse selection? A) Your brother-in-law borrows $20,000 from you to open a pizza parlor, but spends it gambling at the racetrack instead. B) A man with a bad heart condition buys a large life insurance policy. C) A homeowner with a large Fre insurance policy allows the wiring in her house to deteriorate. D) A woman with a large life insurance policy takes up sky diving. 52) How many ±ederal Reserve districts are there? A) 12 B) 2 C) 50 D) 1 53) If a bank has $200,000 of checkable deposits, a required reserve ratio of 20 percent, and it holds $80,000 in reserves, then the maximum deposit out²ow it can sustain without altering its balance sheet is A) $50,000. B) $40,000. C)
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$30,000. D) $25,000. 54) Suppose that the Federal Reserve enacts expansionary policy. Everything else held constant, this will cause the demand for U.S. assets to ________ and the U.S. dollar to ________. A) decrease; depreciate B) increase; depreciate C) decrease; appreciate D) increase; appreciate 55) Banks have a maturity mismatch since A) some of their loans are short term while others are long term.
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  • Spring '13
  • Chikhladze
  • Monetary Policy, Federal Reserve System, federal funds rate

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