The unemployment that is caused by changes in the economy, such as shifts in manufacturing techniques, increased use of computers and electronic machines, and increases in the production of services instead of goods, is called A) structural unemployment. B)
natural unemployment. C) cyclical unemployment. D) frictional unemployment. 12) If a bank's ratio of assets to capital is 25 and it's return on assets is -5%, what is its return on equity? -30% -0.2% -125% -5% ROE= ROA x Lev. Ratio asset to capital is another way of saying lev ratio 13) Financial intermediaries emerged to provide a market for municipal bonds. to reduce transactions costs for traders in stocks and bonds. to make loans to governments. to reduce transactions costs for small savers and borrowers . 14) The percentage of deposits that banks must hold as reserves is called the discount rate. percentage rate. Fed rate. required reserve ratio. 15) The supply curve for bonds would be shifted to the left by A)
a decrease in the corporate tax on profits. B) an increase in tax subsidies for investment. C) a decrease in government borrowing. D) an increase in expected inflation. 16) If the FOMC's directive indicates a change in monetary policy, the account manager at the Fed's Open Market Trading Desk must seek approval of the change from the Secretary of the Treasury. seek approval of the change from a majority of the presidents of the Federal Reserve district banks. design defensive open market operations. design dynamic open market operations . 17) According to the quantity theory of money, if the long-run economic growth rate is 2.5%, by how much should the Fed increase the money supply if it wants inflation to be 2%? 1.25% 5% 0.5% 4.5% MxV=PxY --> m= p +y (% changes) p=2.5 y= 2 thus m = 4.5 18) If oranges sell for $80 per crate in the United States and 3600 pesos per crate in Mexico, the law of one price indicates that you should be able to exchange $1 for 3520 pesos. 3600 pesos. 45 pesos.
0.022 peso. 19) The law of one price states that A) most countries require that all exported goods have the same price. B) most countries require that all entering goods have the same price. C) most countries require that the price of a good not be changed once it is already in a store and available for sale. D) identical goods should have the same price anywhere in the world. 20) Which of the following activities is NOT a primary concern of investment banks?
- Spring '13
- Interest Rates, federal funds rate, federal funds