Econ 224 Practice Third Exam
1. If a seafood restaurant can raise the price of its fried shrimp without losing all of its customers, then the
A. Has market power.
B. Is experiencing economies of scale.
C. Is using predato
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Introduction to Economics
Moore School of Business
University of South Carolina
Meetings: T, TH at 5:30-6:45 pm in room BA 002
Office: I dont have an on campus office since my primary employer is not US
Econ 224 Fourth Exam
1. The uncertainty that results from inflation causes changes in:
A. Consumption but not saving and investment behavior.
B. Income but not consumption.
C. Saving and investment behavior but not consumption.
Chapter 7: Stocks
1. Why do corporations issue stocks? Why do people buy stocks?
2. How do stocks dier from bonds?
3. What is the dierence between systematic and unsystematic risk?
4. Why do indexed funds on average perform better than funds manage
Chapter 5: The structure of interest rates
1. What are the major characteristics of securities and how do these aect their rates of
2. What is a basis point?
3. What does term structure of interest rates refer to?
4. Textbook problem 1.
Chapter 6: Real interest rates
1. What is the dierence between the nominal and real interest rates?
2. Why should savers, borrowers and investors care about real yields rather than nominal
3. What is the equation that links the real and nomin
Chapter 2: The nancial system
1. Textbook problem 1.
2. Textbook problem 2.
3. Textbook problem 3.
4. Textbook problem 4.
5. What is a security?
6. Why is the supply curve for securities upward-sloping?
7. Why is the demand curve for securities dow
Chapter 4: Present value
1. Would you rather receive $1,000 today or 10 years from now? Explain why.
2. Why do we need to compute present values to compare dollar amounts received at
dierent times? Why does the interest rate matter?
3. What is the
Chapter 3: Money and payments
1. Textbook problem 1.
2. Textbook problem 3.
3. Textbook problem 4.
4. Textbook problem 5.
5. Textbook problem 6.
6. Textbook problem 8.
7. Textbook problem 9.
8. What properties are desirable for something that is to